If full-employment output exceeds equilibrium output, greater deficit spending will result in a
A. Smaller recessionary gap.
B. Larger recessionary gap.
C. Smaller inflationary gap.
D. None of the choices are correct.
Answer: A
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Under a fixed exchange rate regime, if a country has an overvalued exchange rate, then its central bank's attempt to keep its currency from ________ will result in a ________ of international reserves
A) depreciating; gain B) depreciating; loss C) appreciating; gain D) appreciating; loss
Recall the illustration in the text where Y = $700 billion, consumers spend $620 billion on consumption goods, and producers make only $600 billion of consumption goods. David Tietlebaum's Poster and Frame store, a representative retail store, is directly affected by this situation. Which of the following does not happen to David?
a. David discovers that the inventories he wants to hold will be reduced. b. David will reorder greater quantities of posters and frames. c. David will sell some of the goods he had expected to hold as investment. d. David will need to restock depleted inventories. e. David will find that his actual investment is greater than intended investment.
Rock Crushers Limited produces smaller rocks from larger rocks. As part of the production process, Rock Crusher Limited takes the below listed actions. Which is a capital investment?
A. Covering the payroll for their rock crushing technicians. B. Purchasing large rocks and crushing them into smaller rocks. C. Storing suitably crushed rock for future sales. D. Making interest payments on their bonds.
A decrease in RGDP will shift the demand curve ______.
a. rightward b. leftward c. upward d. downward