If the money supply equals 2,000, velocity equals 3, and real GDP equals 4,000, then the price level equals:
A. 6,000.
B. 2.
C. 3.
D. 1.5.
Answer: D
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Human capital refers to the
A. number of workers available in the economy. B. tools and equipment available to workers. C. education, training, and skills of workers. D. amount of financing available to start-up firms.
Which one of the following transactions in a particular year is included in gross domestic product for that year?
A) Social Security payments to retirees B) The government pays a computer services company that assisted in the delivery of Social Security payments to retirees. C) A car is produced in the previous year and remains in inventory for the entire year under consideration. D) A stay-at-home parent performs housework that the family would otherwise have paid a maid $20,000 a year to perform.
If workers and firms have rational expectations, they understand that ________ monetary policy will raise the inflation rate, so actual inflation ________ expected inflation
A) contractionary; will be equal to B) contractionary; will be less than C) expansionary; will be greater than D) expansionary; will be equal to E) expansionary; will be less than
Decrease in personal income taxes will ________ the expenditure curve:
A) decrease. B) increase. C) not change. D) none of the above.