Most economists agree that the economy will adjust to a recessionary gap, but the adjustment process
A. is rapid and destabilizing.
B. is moderately quick, but not as rapid as necessary.
C. takes place solely on the supply side.
D. is very slow.
Answer: D
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Which of these transactions results in an increase in M1?
A) withdrawal of $100 cash from your checking account B) certificate of deposit matures, adding $520 to your checking account C) depositing a bank loan of $400 into your savings account D) depositing a $300 paycheck into your savings account E) none of the above
Which of the following would be likely to increase the doubling time for an economy's real GDP?
A. government policies improve the health of the population B. the rate of population growth slows C. an increase in the technology used for producing goods and services D. better education increases the productivity of workers
Assume the market for ball bearings is purely competitive. Currently, each of the firms in this market is making a positive level of economic profits. In the long run, we can expect the market:
A. supply to increase. B. supply to decrease. C. demand to decrease. D. demand to increase.
The point on the production possibilities curve that is most desirable can be found by:
A. estimating the marginal costs of both products in real or physical terms. B. comparing marginal benefits and marginal costs. C. determining where least-cost production occurs. D. calculating where economic growth will be greatest.