An economy's long-run equilibrium is
A) the equilibrium that would occur if prices were perfectly flexible.
B) the equilibrium that would occur if prices were perfectly flexible and always adjusted immediately.
C) the equilibrium that would occur if prices were perfectly flexible and always adjusted immediately to preserve full employment.
D) the equilibrium that would occur if prices were perfectly fixed to preserve full employment.
E) the equilibrium that would occur if prices were perfectly fixed at the full employment point.
C
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
The policy tool of "credit easing" refers to the
A) Fed's purchase of private securities to stimulate banks' lending. B) Fed's requirement that the federal government must lend to directly to home buyers. C) federal government's requirement that the Fed must lend directly to home buyers. D) Fed's lowering of the federal funds rate to zero. E) Treasury's issuance of federal debt to finance home buying.
Jorge deposited $1,000 into an account three years ago. The first two years he earned 5 percent interest; the third year he earned 6 percent interest. How much money does Jorge have in his account today?
a. $1,157.90 b. $1,168.65 c. $1,176.00 d. None of the above are correct to the nearest cent.
Indifference curves
A) are vertical. B) are horizontal. C) slope upward. D) slope downward.