A rational individual would rather receive $5,000 today than receive $6,000 in one year if the applicable nominal interest rate was 10%
a. True
b. False
Indicate whether the statement is true or false
False
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The short-run aggregate supply curve is horizontal when
A) prices are inflexible and the economy is at full employment. B) there are unemployed resources and prices do not increase when aggregate demand increases. C) there are unemployed resources and prices do not decrease when aggregate supply increases. D) there are no unemployed resources and prices do not increase when aggregate demand or supply increases.
Inventories are included in GDP because
A. they are value added to final goods. B. they were produced and are sold in their final form. C. they will depreciate. D. they are considered government spending.
If low-income households spend a larger share of their income on food than do high-income households, then a tax on food is:
A. a way to redistribute from the wealthy to the poor. B. a regressive tax. C. a proportional tax. D. a progressive tax.
An increase in government expenditures is an example of expansionary fiscal policy.
Answer the following statement true (T) or false (F)