The ultimate result of the multiplier-accelerator interaction is a(n)
a. lengthy period of economic growth and prosperity similar to the one experienced in the 1990s
b. prosperity at an annual growth rate of about three percent, which is the rate of growth of full employment GDP
c. noninterventionist government countercyclical fiscal policy
d. need for the economy's rate of growth to grow or at least remain constant otherwise a positive but slower growth rate can spark an economy's downturn
e. need for the economy to maintain its current level of consumption to justify the increased level of capital stock
D
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What is efficiency?
What will be an ideal response?
In the long run, a perfectly competitive firm will react to profits by _____
a. improving the quality of its products b. increasing the price of the good it produces c. reducing its labor inputs d. increasing its level of output
What is characteristic of a traditional economy?
What will be an ideal response?
A person puts a $100 bill in the glove compartment of his car in case of an emergency. This is an example of
A. the transaction demand for money. B. the irrational demand for money. C. the precautionary demand for money. D. the emergency investment demand for money.