Which of the following was an outcome of political disagreement about balancing the federal budget in 2013?
a. a default on treasury bonds
b. a two-week government shutdown
c. delayed Treasury bond payments
d. resignation of several government economists
b. a two-week government shutdown
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
How can the Federal Reserve actually increase the money supply?
A) by delaying transfer of money among banks B) by purchasing more government bonds in the open market C) by doubling the reserve requirement D) by raising the discount rate
Under a fixed exchange rate system, the exchange rate
a. is equal to one. b. fluctuates as the price of gold fluctuates. c. is fixed and interest rates must vary in response to balance of payment movements. d. can periodically change as economic conditions change.
Oil is a key input to the U.S. economy. Describe scenarios in which oil could be involved in each of the following types of shifts: a rightward shift in the short-run aggregate supply (SRAS) curve, a leftward shift in the SRAS curve, a rightward shift in the long-run aggregate supply (LRAS) curve, and a leftward shift in the LRAS.
What will be an ideal response?