If aggregate planned expenditures exceed real GDP, then
A) inventories increase above their planned levels and businesses decrease their production.
B) inventories decrease below their planned levels and businesses decrease their production.
C) there is no equilibrium level of real GDP.
D) unplanned inventory changes equal zero.
E) inventories decrease below their planned levels and businesses increase their production.
E
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If marginal revenue exceeds marginal cost, then a profit-maximizing perfectly competitive firm should:
a. increase output. b. decrease output. c. leave output unchanged. d. increase price.
Between 2009 and 2011, Federal Spending as a percentage of GDP ranged between
A. 35% and 45%. B. 22% and 25%. C. 16% and 22%. D. 47% and 61%.
What are the primary effects of cost-push inflation?
A. It raises real output but redistributes a decreased level of real income. B. It raises real output and redistributes an increased level of real income. C. It reduces real output and redistributes a decreased level of real income. D. It reduces real output but redistributes an increased level of real income.
The commercial banking system can lend by a multiple of its excess reserves primarily because:
A. Its reserves are on deposit with the Federal Reserve Banks B. Its reserves are highly liquid assets C. It loses reserves when it extends credit D. Its required reserves are fractional