The government spending multiplier is likely to be ________ during periods of low output and high unemployment.
A. smaller
B. zero
C. infinite
D. larger
Answer: D
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Assume that inventories declined by more than analysts predicted. This implies that
A) planned aggregate expenditure was less than real GDP. B) planned aggregate expenditure is unrelated to real GDP. C) planned aggregate expenditure was greater than real GDP. D) planned aggregate expenditure was equal to real GDP.
Classical economists believe that
A) money is neutral. B) an increase in the real money supply affects output. C) inflation is determined by wage growth. D) monetary policy should be used to combat recessions.
The joining of a firm with another to which it sells an output or from which it buys an input is known as
A) a conglomerate merger. B) a horizontal merger. C) a vertical merger. D) economies to scale.
After firm A acquired firm B, it raised the prices for the goods produced by both firms. This can increase profits if those goods are
a. Substitutes b. Complements c. Not related d. None of the above