Which of the following macroeconomic variables is countercyclical?
A. Money growth
B. Unemployment
C. Real interest rates
D. Consumption
Answer: B
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If the IS curve is negatively sloped and the LM curve is positively sloped
A) an increase in government expenditures will raise real GDP and lower interest rates. B) a fall in the real money supply will raise real GDP and lower the interest rate. C) an increase in taxes and an increase in money supply will lower the interest rate and give little or no change in real GDP. D) an increase in taxes and a fall in the money supply will raise the interest rate and give little or no change in real GDP.
If a price of corn is $3.00 a bushel, 5,000 bushels would be demanded. If the price rises to $4.00 a bushel, 4,000 bushels would be demanded
a. What is the (arc) price elasticity of demand? b. Based on this answer, if the price of corn rose to $5.00 a bushel, what would be the demand for corn? c. If the price of corn decreased from $4.00 to $3.00 a bushel, what would be the change in total revenue for sellers of corn? d. If the price of corn increased from $4.00 to $5.00 a bushel, what would be the change in total revenue for sellers of corn?
The primary conclusion of using inflation accounting is that inflation
A. distorts the tax system and results in slower economic growth. B. reduces the national debt to its nominal value instead of its real value. C. causes recessions and increases the structural deficit. D. distorts government budget accounting by exaggerating interest expense.
(Advanced analysis) The equation C = 35 + .75Y, where C is consumption and Y is disposable income, shows that:
A. households will consume three-fourths of whatever level of disposable income they receive. B. households will consume $35 if their disposable income is zero and will consume three- fourths of any increase in disposable income they receive. C. there is an inverse relationship between disposable income and consumption. D. households will save $35 if their disposable income is zero and will consume three-fourths of any increase in disposable income they receive.