Which of the following statements accurately describes the U.S. economy over the long run?
a. The nation’s long-run aggregate supply curve shifts leftward over time as potential output grows.
b. The economy is often at a point where actual and potential real GDP are equal.
c. The nation’s potential real GDP at full employment shifts rightward over time.
d. The economy often operates along the long-run aggregate supply curve.
c. The nation’s potential real GDP at full employment shifts rightward over time.
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When the Fed buys government securities in the open market, the money supply ________ because ________
A) decreases; banks lose liquidity, they make fewer loans and checking account deposits decrease B) increases; banks gain liquidity, they make more loans and checking account deposits increase C) increases; banks lose liquidity, they make more loans and checking account deposits increase D) decreases; banks gain liquidity, they make fewer loans and checking account deposits decrease E) none of the above
The production possibilities curve shows:
A. the maximum amount of one good that can be produced for every possible production level of the other good. B. how increasing the resources used to produce one good increases the production of the other good. C. how increasing the production of one good allows production of the other good to also rise. D. the minimum amount of one good that can be produced for every possible production level of the other good.
An activity that makes some people better off and nobody worse off is a
A. price floor that increases income to suppliers. B. government transfer program such as Social Security. C. reduction in interest rates. D. voluntary exchange.
Which Federal Reserve Bank now regularly tracks target levels for the federal funds rate predicted by a basic Taylor-rule equation?
A. St. Louis B. Chicago C. Dallas D. New York