If actual GDP is $340 billion and there is a positive GDP gap of $20 billion, potential GDP is:
A. $360 billion.
B. $660 billion.
C. $320 billion.
D. $20 billion.
C. $320 billion.
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The interest rate the Federal Reserve charges a bank when it borrows reserves from the Fed is called the
A) federal funds rate. B) prime rate. C) market interest rate. D) discount rate. E) borrowing rate.
In the simplest Keynesian model, planned investment is assumed to be
a. positively related to income. b. negatively related to income. c. constant. d. absent.
Which of the following sequences best explains the negative slope of the aggregate-demand curve?
a. price level ? ? demand for money ? ? equilibrium interest rate ? ? quantity of goods and services demanded ? b. price level ? ? demand for money ? ? equilibrium interest rate ? ? quantity of goods and services demanded ? c. price level ? ? demand for money ? ? equilibrium interest rate ? ? quantity of goods and services demanded ? d. price level ? ? equilibrium interest rate ? ? demand for money ? ? quantity of goods and services demanded ?
Maximizing revenue maximizes profits.
Answer the following statement true (T) or false (F)