Potential GDP in the United States
A) does not change over time.
B) grows as the economy grows.
C) changes over a given business cycle.
D) declines over time.
Answer: B
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Keynes's theory of the demand for money implies that velocity is
A) not constant but fluctuates with movements in interest rates. B) not constant but fluctuates with movements in the price level. C) not constant but fluctuates with movements in the time of year. D) a constant.
Which of the following is an example of political action that reflects the shortsightedness effect?
a. budget surpluses b. the promise of future benefits without providing for their funding c. spending on roads and highways d. spending on programs that transfer income from the rich to the poor
Keynesian macroeconomists believe that the time it takes for falling wages and prices to eliminate a recessionary gap is __________ enough to say that the economy is __________
A) long; not self-regulating B) long; self-regulating C) short; not self-regulating D) short; self-regulating
Advertising is a waste of money and just drives up costs and thus price to consumers.
Answer the following statement true (T) or false (F)