Real GDP or total output in any year is equal to:
A. Labor productivity divided by number of worker-hours
B. Labor productivity multiplied by real output
C. Number of worker-hours multiplied by labor productivity
D. Number of worker-hours divided by labor productivity
C. Number of worker-hours multiplied by labor productivity
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In an economy in which velocity is constant and the same level of real output is produced year after year, a slow increase in the money supply would result in a: a. constant price level
b. slowly increasing price level. c. rapidly increasing price level. d. slowly increasing real GDP. e. rapidly increasing real GDP.
Policy makers who believe that the costs of inflation are very high will tend to favor which of the following during an inflationary gap?
a. moderate fiscal stimulus, no monetary stimulus b. fiscal and monetary tightness c. moderate monetary stimulus, fiscal tightness d. strong fiscal and monetary stimulus
As price rises, quantity demanded ___________.
Fill in the blank(s) with the appropriate word(s).
You observe that when stock prices rise, interest rates soon fall, and therefore conclude that higher stock prices lead to lower interest rates. This would be an example of:
A. The fallacy of composition B. Tradeoff among economic goals C. The post hoc fallacy D. The use of loaded terminology