Economists first began studying the relationship between changes in aggregate expenditures and changes in GDP during
What will be an ideal response?
the great depression
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A product can be classified to be an inferior good if an increase in the income of buyers causes
a. A decrease in quantity demanded b. A decrease in demand c. An increase in demand d. An increase in quantity demanded.
The substitution effect of a change in wage rate on a firm's demand for labor input will be more significant
a. the greater the change in output. b. the more sharply curved are the firm's isoquants. c. the flatter are the firm's isoquants. d. the larger the quantity of labor employed.
A bank has $10,000 in excess reserves and the required reserve ratio is 20 percent. This means the bank could have __________ in checkable deposit liabilities and __________ in total reserves
A) $80,000, $10,000 B) $100,000, $20,000 C) $50,000, $25,000 D) $100,000, $30,000
Figure 16-1
In Figure 16-1, there are four levels of income. G is government expenditures and TT is taxes less transfers. At which level of income is the actual deficit the greatest?
a.
Y4
b.
Y3
c.
Y2
d.
Y1