If the quality of a good deteriorates from one year to the next while its price remains the same, then the value of a dollar falls
a. True
b. False
Indicate whether the statement is true or false
True
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
A utility function is:
A. an equation for calculating the most utility a particular person can derive. B. an equation for calculating the total utility that a particular person derives from consuming a particular good over a particular time period. C. an equation for calculating the total utility that a group of people derive from consuming a particular good. D. an equation for calculating the total utility that a particular person derives from consuming a particular combination of goods and services.
Additions to inventory subtract from GDP, and when the goods in inventory are sold, the reductions in inventory add to GDP
a. True b. False Indicate whether the statement is true or false