Gross private domestic investment or simply business investment spending (I):
a. excludes all investment in the United States by foreign firms.
b. includes all capital in the United States.
c. includes net additions to the capital stock plus all new corporate stocks and bonds.
d. includes business expenditures on new factories, tools, and machinery.
d
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
If potential output exceeds actual output, the aggregate demand curve shifts downward over time
Indicate whether the statement is true or false
The concept of market structure refers to three main characteristics of buyers and sellers in a particular market. These include ____
a. the degree of seller and buyer concentration in the market b. the degree of actual or imagined differentiation between the products or services of competing producers c. the pricing behavior of the firms d. a and b e. a, b, and c
The money supply will grow faster through deposit creation when the required reserve ratio is:
a. high and banks hold excess reserves. b. high and banks cannot find good customers to lend to. c. low and banks are able to lend out all of their excess reserves. d. low and banks are unable to loan out all of their excess reserves. e. high and banks are not able to loan out all of their excess reserves.