If the financial sector causes more to flow into spending than is saved, most likely:
A. the economy will experience recession.
B. there will be too many real assets produced.
C. the economy will experience inflation.
D. the supply of real assets will exceed the demand for real assets.
Answer: C
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If planned investment is equal to actual investment, then aggregate expenditure is equal to GDP
Indicate whether the statement is true or false
During periods of high inflation, such as the 1979-1980 period, the existence of usury laws may cause
a. nominal rates of interest to be above real rates. b. negative nominal rates of interest. c. negative real rates of interest. d. real rates of interest to be above nominal rates.
Economics is a social science that is concerned with:
of productive resources so there is a minimum level of income b. The best use of scarce resources paid for at the highest level of cost to consumers and businesses c. The best use of scarce resources to achieve the maximum satisfaction of economic wants d. Increasing the amount of productive resources so there is maximum output in society
Which of the following is a true statement?
A. Under normal conditions, there is a short-run trade-off between inflation and unemployment. B. There is a long-run trade-off between inflation and unemployment. C. The short-run Phillips Curve is vertical. D. The long-run Phillips Curve is horizontal.