Once macroeconomic equilibrium has been established in an economy, there is no tendency for real GDP to change, even if there is a change in autonomous expenditure
a. True
b. False
Indicate whether the statement is true or false
False
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According to the life-cycle hypothesis, if a person wants consumption to be constant over her lifetime, she will smooth consumption by initially ________ over her lifetime
A) saving, then dissaving, then borrowing B) borrowing, then saving, then dissaving C) dissaving, then borrowing, then saving D) saving; then borrowing; then dissaving
When actual output exceeds potential output there is ________ output gap and the rate of inflation will tend to ________.
A. no; remain the same B. an expansionary; decrease C. an expansionary; increase D. a recessionary; increase
Prices for industrial commodities such as steel rods or machine tools are:
A. heavy prices. B. sticky prices. C. auction prices. D. custom prices.
In a fixed exchange rate system, a decrease in the exchange rate at which a currency is pegged is called a(n):
A. appreciation. B. devaluation. C. revaluation. D. depreciation.