At the equilibrium level of real GDP, which of the following is true?
a. Unplanned inventory investment is positive.
b. Unplanned inventory investment is negative.
c. Aggregate output equals aggregate expenditures.
d. Aggregate output plus consumption spending equals aggregate expenditures.
c
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Consider an economic policy regime in which rules are well-known but frequently ignored. Which of these statements is true?
A) This regime might work in the long-run, but is unlikely to produce good outcomes in the short run. B) Policymakers in this regime might find that rules are being broken with increasing frequency. C) This regime is more likely to be supported by nonactivist, than by activist policymakers. D) This regime is more likely to result in high unemployment than in high inflation. E) This regime is unlikely to produce large government budget deficits.
Logrolling would allocate resources efficiently if everyone could participate. List and explain two reasons why we do not see logrolling in general elections
What will be an ideal response?
Recall the Application about the Fed's response to the collapse of the investment house Bear Stearns as well as its handling of the 2008 financial crisis with respect to other financial institutions to answer the following question(s). According to this Application, the Fed responded to the financial crisis by continuing to develop new programs. One example of this was its announcement that it would now purchase commercial paper, which is the short-term debt of corporations. This is an example of the Fed acting as a:
A. medium of exchange. B. lender of last resort. C. store of value. D. unit of account.
Baumol and Blinder offer some reasons why countries trade with each other. List three of the reasons, and give an example of each to illustrate the reason.
What will be an ideal response?