Figure 10-5
In Figure 10-5, which graph best illustrates the situation of an economy with high unemployment that experiences an increase in investment spending?
a.
(1)
b.
(2)
c.
(3)
d.
(4)
c
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According to the Taylor rule, if inflation equals 3 percent and there is an expansionary gap equal to 3 percent of potential output, the Fed will set a real interest rate of ________ percent and a nominal interest rate of ________ percent.
A. 4; 6 B. 1; 3 C. 1; 4 D. 4; 7
Diminishing returns set in when a firm increases its labor and capital at the same time
Indicate whether the statement is true or false
Taxes on specific goods such as cigarettes, gasoline, and alcoholic beverages are called
a. sales taxes. b. excise taxes. c. social insurance taxes. d. consumption taxes.
Discuss the primary causes of bank failures in the United States during the late 1920s and early 1930s.
What will be an ideal response?