Describe the difference between business-cycle macroeconomics and economic-growth macroeconomics
Business-cycle macroeconomics involves changes in Real GDP (up and down) around a fixed LRAS curve. Economic-growth macroeconomics deals with increases in Real GDP resulting from a rightward-shifting LRAS curve. The rightward shifts in the LRAS represent economic growth.
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Which of the following accounts for the largest percentage of spending by households in the United States?
a. durable goods b. nondurable goods c. services d. insurance payments e. underground activities (e.g., illegal activities)
Market power allows firms to raise prices significantly above the competitive level.
Answer the following statement true (T) or false (F)
When the money supply increases at the same time that velocity is decreasing, total spending will
A) always rise. B) always decline. C) fall if the decrease in velocity is relatively less than the increase in the money supply. D) fall if the decrease in velocity is relatively greater than the increase in the money supply.
Which pair of goods is likely to have the largest positive cross-price elasticity?
A. Butter and margarine B. Ramen noodles and a Rolex watch C. Peanut butter and jelly D. Cross-price elasticity is always negative, and simply reported in absolute value.