If firms increase their investment spending by $10 million, then the economy's equilibrium output rises by exactly $10 million
a. True
b. False
Indicate whether the statement is true or false
False
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Most monetarists favor:
A. frequent changes in the growth rate of the money supply to avoid inflation. B. placing the Federal Reserve under the Treasury. C. a steady, gradual shrinkage of the money supply. D. a constant increase in the money supply year after year equal to the potential annual growth rate in real GDP.
The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
The Law of Supply states that:
A) supply creates its own demand. B) the quantity supplied of a good will always equal the quantity of the good demanded. C) the quantity supplied of a good rises when the price rises. D) at the equilibrium price, there is always some excess supply in the market.
The two theoretical extremes of the market structure spectrum are occupied at one end by perfect competition and on the other end by monopoly
a. True b. False Indicate whether the statement is true or false