If firms receive an economic forecast predicting future increases in the growth of real GDP, they are likely to respond by
A) increasing their level of investment spending to increase future production capacity.
B) decreasing their level of investment spending to decrease current production capacity.
C) increasing their level of investment spending to increase current production capacity.
D) decreasing their level of investment spending to decrease future production capacity.
A
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Define what is meant by the period known as the short run
What will be an ideal response?
With perfect asset substitutability and capital mobility the domestic interest rate is equal to the foreign rate
Indicate whether the statement is true or false
If the economy is growing 5% a year and GDP is $1000 billion, the additional revenues available to meet interest payments on the government deficit would be, ceteris paribus,
A) 50. B) 500. C) It depends upon the amount of new debt issued. D) There would be no additional revenues.
Which of the following is included in M1?
A. Certificates of deposit. B. Treasury bills. C. Balances in transactions accounts. D. Balances in savings accounts.