According to the quantity theory of money, if the economy were facing inflation, the Federal Reserve Bank could combat it by:
A. increasing the supply of money.
B. increasing taxes.
C. cutting taxes.
D. decreasing the supply of money.
Answer: D
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A credible promise is:
A. possible to keep. B. made by a honest person. C. in the promiser's interest to keep. D. legally enforceable.
Real GDP refers to GDP adjusted:
A) for changes in ruling political party. B) for changes in tax rates. C) for changes in net imports. D) for changes in prices.
Historically barriers to development in the U.S., such as the dry deserts of some of the country's western states, have been solved by
(a) only government action. (b) only private action. (c) a blend of government and private actions. (d) foreign expertise.
Appendix: When using a multiplicative power function (Y = a X1b1X2b2X3b3) to represent an economic relationship, estimates of the parameters (a, and the b's) using linear regression analysis can be obtained by first applying a ____ transformation to convert the function to a linear relationship
a. semilogarithmic b. double-logarithmic c. reciprocal d. polynomial e. cubic