If the equilibrium level of real Gross Domestic Product (GDP) is greater than the full-employment real Gross Domestic Product (GDP) consistent with the position of the economy's long-run aggregate supply (LRAS) curve, then the difference between full-employment real Gross Domestic Product (GDP) and current equilibrium real Gross Domestic Product (GDP) is
A. an inflationary gap.
B. the level of output consistent with natural unemployment.
C. a recessionary gap.
D. an aggregate demand shock.
Answer: A
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The Board of Governors of the Federal Reserve System does NOT
A) consist of seven members with fourteen-year terms. B) include the presidents of the twelve Federal Reserve Banks. C) utilize a system of rotations so that a position comes open every two years. D) consist of members whose appointments have been approved by the Senate.
Consider the same market for nonalcoholic beer as in the previous question. How many "units" of beer will Boors produce in the Nash equilibrium?
a. 667 b. 1,667 c. 2,333 d. 3,000
When a good is rival in consumption,
a. one person's use of the good diminishes another person's ability to use it. b. people can be prevented from using the good. c. an unlimited number of people can use the good at the same time. d. everyone will be excluded from obtaining the good.
Refer to the information provided in Figure 27.2 below to answer the question(s) that follow.
Figure 27.2Refer to Figure 27.2. In response to a decrease in net taxes, the Fed would increase the interest rate by the greatest amount when the aggregate demand curve shifts from
A. AD1 to AD2. B. AD3 to AD4. C. AD5 to AD6. D. AD6 to AD1.