When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand
B. increase; raise; decline
C. decline; lower; decline
D. decline; raise; decline
Answer: B
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Disposable personal income measures the after-tax income received by households
a. True b. False Indicate whether the statement is true or false
If labor is the only variable input, an additional worker increases output from 72 to 78 units, and the product price is $6, the marginal revenue product from an additional worker: a. is $6
b. is $36. c. is $78. d. is $432.
Critics of government-run employment agencies and public training programs argue that the private market is better at matching workers and jobs than the government is
a. True b. False Indicate whether the statement is true or false
A decrease in investment causes the price level to ________ in the short run and ________ in the long run
A) increase; increase further B) increase; decrease C) decrease; decrease further D) decrease; increase