An operational lag is the time taken by policymakers to recognize the existence of an economic expansion or recession
a. True
b. False
Indicate whether the statement is true or false
False
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Disposable income ________ when ________
A) decreases; taxes increase B) decreases; transfer payments increase C) increases; government expenditures decrease D) decreases; aggregate income increases
For a firm in a perfectly competitive product market, the marginal resource cost curve is horizontal if the resource market is also competitive
a. True b. False
Suppose you found $5,000 hidden in your closet and deposited it in a demand deposit account at your bank. If the reserve requirement was 10 percent, the deposit would directly create ____ in excess reserves and ultimately lead to a ____ total increase in the money supply, if all banks in the system lend out 100 percent of their excess reserves
a. $500; $5,000 b. $4,500; $5,000 c. $4,500; $45,000 d. $4,500; $50,000
If the free market is called upon to provide public goods, then:
A. there will more goods provided than is optimal. B. there will be fewer goods provided than is optimal. C. the market will provide the optimal number of goods. D. the market price will be correct, but the optimal amount of output will not be produced.