What pattern would you observe in an economy in which aggregate demand is increasing but in which long-run aggregate supply remained the same?
A) secular deflation
B) inflation accompanied by no change in real GDP
C) inflation accompanied by declines in real GDP
D) a decline in consumption spending
Answer: B) inflation accompanied by no change in real GDP
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The opportunity cost of the U.S. producing tea or coffee is measured by the value of the foregone production alternative—manufacturing or staples
Indicate whether the statement is true or false
Federal Reserve regulations apply
a. to all banks in the United States b. only to member banks c. only to private commercial banks d. only to national banks e. only to state banks
The consumption function shows the relationship between
a. planned consumption expenditures and disposable income. b. permanent income and savings. c. business inventory and real GDP. d. aggregate demand and aggregate consumption.
Protectionism is used for all of the following reasons except _____.
(A) Keeping out immigrants. (B) Keeping jobs. (C) Taking care of an infant industry. (D) Safeguarding national security.