A recessionary gap exists when
a. real GDP exceeds nominal GDP.
b. nominal GDP exceeds real GDP.
c. real GDP exceeds potential GDP.
d. potential GDP exceeds real GDP.
d
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In the above figure, the economy is at point a on the initial supply of loanable funds curve SLF0. What happens if real wealth decreases?
A) Nothing; the economy would remain at point a. B) There would be a movement to a point such as b on supply of loanable funds curve SLF0. C) The supply of loanable funds curve would shift rightward to a curve such as SLF2. D) The supply of loanable funds curve would shift leftward to a curve such as SLF1.
If the absolute value of your calculated t-statistic exceeds the critical value from the standard normal distribution, you can
A) reject the null hypothesis. B) safely assume that your regression results are significant. C) reject the assumption that the error terms are homoskedastic. D) conclude that most of the actual values are very close to the regression line.
"When a third party (for example, an insurance company or the government) pays all or most of the cost of a good or service, the incentive of consumers to shop for the best value per dollar spent and of producers to offer the item at an economical price is substantially reduced." This statement is
a. essentially true. b. false; consumers will still have a strong incentive to search for the most economical price even if someone else is paying the bill. c. false; producers will still have a strong incentive to keep prices low even if consumers are non-responsive to price differences among suppliers. d. false; the party paying for the good will not influence the incentive of either consumers or producers to economize.
In a simple lawn-mowing business where you have a push mower and labor as input, what would be the impact of adding an additional input in the form of a gas self-propelled mower (capital)?
A. Average product and marginal product would fall. B. Average product and marginal product would rise. C. Average product would rise, and marginal product would fall. D. Average product would fall, and marginal product would rise.