An economy characterized by high unemployment is likely to be
A. having a recessionary expenditure gap.
B. having an inflationary expenditure gap.
C. experiencing hyperinflation.
D. experiencing a high rate of economic growth.
Answer: A
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A decrease in the reserve requirement ________ bank reserves and ________ the money supply
A) increases; increases B) decreases; decreases C) increases; decreases D) decreases; increases
A positive economic profit signals that the investors of a firm should divert their funds to alternative ventures
a. True b. False Indicate whether the statement is true or false
If the Federal Reserve is engaging in open market operations designed to expand the money supply, it is probably
a. selling government securities to banks. b. selling government securities to the public. c. buying government securities from the public. d. encouraging banks to exchange their Fed deposits for currency.
U.S. GDP excludes the production of most illegal goods
a. True b. False Indicate whether the statement is true or false