The entire sequence of a decline in aggregate economic activity followed by recovery, measured from peak to peak or trough to trough is a
A. long-run trend.
B. potential output path.
C. recurrent comovement.
D. business cycle.
Answer: D
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If potential output equals 4,000 and short-run equilibrium output equals 3,500, there is a ________ gap and the Federal Reserve must ________ real interest rates in order to close the gap.
A. expansionary; raise B. recessionary; raise C. recessionary; reduce D. recessionary; not change
The supply curve for a competitive firm is
A) its entire MC curve. B) the upward-sloping portion of its MC curve. C) its MC curve above the minimum point of the AVC curve. D) its MC curve above the minimum point of the ATC curve. E) its MR curve.
When the Federal Reserve conducts an open-market purchase, the money supply _____ and aggregate demand _____
Fill in the blank(s) with correct word
Evidence shows that children from poor communities typically have:
A. reduced opportunities to acquire human capital. B. equal opportunities to acquire human capital, and choose to acquire more on average than others. C. increased opportunities to acquire human capital. D. equal opportunities to acquire human capital, but choose not to acquire as much on average than others.