If planned aggregate spending in an economy can be written as PAE = 15,000 + 0.6Y ? 20,000r, and potential output equals 35,000, what real interest rate must the Federal Reserve set to bring the economy to full employment?
A. 4 percent
B. 2 percent
C. 3 percent
D. 5 percent
Answer: D
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Spreading wealth across multiple investments is called
A) diversification. B) arbitrage. C) speculation. D) asset liquification.
Everything else held constant, if the sum of the required reserve ratio and the excess reserve ratio is less than one, an increase in the currency-deposit ratio causes the M1 money multiplier to ________ and the money supply to ________
A) decrease; increase B) increase; decrease C) decrease; decrease D) increase; increase
Economic growth is measured by the: a. advancement in the quality of a nation's technology
b. rate of business investment and capital formation. c. annual percentage change in per capita real output of goods and services. d. marginal change in nominal output divided by total output from the previous year.
Resource X is necessary to the production of good Y. If the price of resource X falls,
A) the supply curve of Y shifts leftward. B) the supply curve of Y shifts rightward. C) the supply curve of Y is unaffected. D) there is a movement down the supply curve of Y. E) there is a movement up the supply curve of Y.