A contractionary monetary policy helps close an inflationary gap in an economy but leads to lower levels of output and employment
a. True
b. False
Indicate whether the statement is true or false
True
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When income increases by 1%, the quantity demanded of a good decreases by 2%. What is the income elasticity of the good? Is the good normal or inferior? Why?
What will be an ideal response?
Which of the following is not a legitimate reason for maintaining federal budget deficits? a. Deficits boost domestic saving, which in the long run could promote economic growth. b. Deficits help reduce the size and duration of recessions through automatic stabilizers. c. Deficits are used to finance capital projects
d. Public spending through deficit financing wins support from the voters. e. A federal budget deficit stimulates aggregate demand.
If the demand for a good is elastic, when the price increases, the
A) demand will decrease. B) quantity demanded will increase. C) quantity demanded will decrease by a smaller percentage than the price increased. D) quantity demanded will decrease by a greater percentage than the price increased.
Ida May Fuller was the first person to:
A. receive a Social Security check. B. have her Social Security check adjusted for inflation. C. receive Social Security payments for over 20 years. D. petition Congress for indexing Social Security payments.