If an assumption is made that a society is operating on its production possibilities curve, an outward shift of the curve implies
A. economic growth has occurred.
B. the society is making more efficient use of its available resources.
C. consumer demand has increased.
D. the present value of capital resources has increased.
A. economic growth has occurred.
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According to the equation of exchange, nominal GDP equals
A) the amount of actual money balances divided by the income velocity of money. B) the price level divided by the income velocity of money. C) the amount of actual money balances times the income velocity of money. D) the price level times the income velocity of money.
The implementation lag for fiscal policy ________ it is for monetary policy
A) can be much longer than B) is generally much shorter than C) is usually the same as D) There is not an implementation lag for fiscal policy.
If this quote is TRUE, what would the neoclassical growth theory predict?
A) Economic growth stops because most technological advances have already been made. B) Economic growth is temporary regardless of technological change and GDP per person returns to subsistence levels. C) Economic growth will persist indefinitely because technological change will accelerate again as firms seek profits. D) Economic growth will accelerate because these technological changes are permanent.
The reason that stagflation tends to follow an inflationary gap is that
a. output tends to fall even as prices continue to rise as part of the self-correcting mechanism. b. government officials tend to overact in controlling inflation. c. businesses try to increase profits by raising prices and increasing output. d. workers accept pay cuts to maintain employment.