Two countries with the same saving rates must have the same growth rate of real GDP per person
a. True
b. False
Indicate whether the statement is true or false
False
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Assume that the marginal propensity to consume in an economy is 0.9. If the economy's full-employment real GDP is $500 billion and its equilibrium real GDP is $550 billion, there is an inflationary expenditure gap of
A. $5 billion. B. $500 billion. C. $100 billion. D. $50 billion.
The "kinked" oligopoly demand curve is a result of the assumption by an oligopolist that:
a. price increases will be matched, but price reductions will not. b. price increases will not be matched, but price reductions will. c. both price increases and price reductions will be matched. d. neither price increases, nor price reductions will be matched.
Fiscal policy consists of
a. taxes and interest rates. b. government purchases and defense spending. c. the money supply and taxes. d. taxes and government spending.
Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher