Keynes assumed that wages and prices were slow to adjust in order to explain
A. why inflation fell in recessions.
B. persistently high unemployment.
C. the high level of interest rates.
D. high inflation.
Answer: B
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Say's Law can be succinctly restated as:
A. "In equilibrium, supply equals demand." B. "Supply creates its own demand." C. "The more things change, the more they stay the same." D. "If something cannot go on forever, it will stop."
Since 1960, infant mortality rates in the United States have
A) dropped more than 75%. B) dropped by about 20%. C) risen slightly. D) dropped by less than 5%.
An increase in the real interest rate
A) increases savings for both borrowers and lenders. B) increases savings for borrowers, but has an uncertain effect on the savings of lenders. C) increases savings for lenders, but has an uncertain effect on the savings of borrowers. D) has an uncertain effect on the savings of both borrowers and lenders.
If nominal GDP is $800 billion and, on average, each dollar is spent four times in the economy over a year, then the quantity of money demanded for transactions purposes will be:
A. $200 billion B. $400 billion C. $800 billion D. $3,200 billion