Advocates of the passive approach to government economic policy believe that the government should lower tax rates when there is a recessionary gap
a. True
b. False
Indicate whether the statement is true or false
False
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If aggregate expenditure in an economy equals 1,000 + 0.9Y and full employment real GDP equals 9,000, then this economy has
A. an inflationary gap. B. no output gap. C. a recessionary gap. D. no autonomous expenditure.
The income elasticity of demand for bicycles is +10, which implies that bicycles are
A) an inferior good. B) a normal good. C) a substitute good for motorbikes. D) a complement good for motorbikes.
What are the two most important demand for money-shifters?
a. changes in price level and in NGDP b. changes in supply level and in NGDP c. changes in price level and in RGDP d. changes in supply level and in RGDP
Which of the following would not be considered a positive addition to household wealth?
A) the equity in one's home B) 1,000 shares of Microsoft stock C) a credit card balance D) the balance in your checking account