The reason why self-correction works to close a recessionary gap is because:
a. a labor shortage causes wages to increase.
b. a labor surplus causes wages to increase.
c. a labor shortage causes wages to fall
d. a labor surplus causes wages to fall.
e. a labor surplus causes price to fall.
d
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For movements along the long-run aggregate supply curve
A) potential GDP is dependent on the price level. B) the prices of goods and services change while the prices of productive resources hold steady. C) the price level and the money wage rate change by the same percentage. D) All of the above are correct.
Which of the following has proved to be spectacularly false, at least recently?
A. As an expansion proceeds, people will hold no more cash. B. As an expansion proceeds, banks will hold no more excess reserves. C. The oversimplified money multiplier formula is predicated on two critical assumptions. D. All of the above are false.
In Year 1, the actual budget deficit was $150 billion and the cyclically-adjusted deficit was $125 billion. In Year 2, the actual budget deficit was $130 billion and the cyclically-adjusted deficit was $125 billion. It can be concluded that from Year 1 to Year 2:
A. Real GDP decreased B. Real GDP increased C. Full employment was attained D. Fiscal policy became less expansionary
The total amount of satisfaction yielded by the consumption of a good or service is called
A. market equilibrium. B. total demand. C. total utility. D. maximized behavior.