Which of the following statements is true?
A) Another name for capital consumption allowance is depreciation.
B) When there are two consecutive quarterly declines in Real GDP the economy is said to be in recession (based on the standard definition).
C) In the expansion phase of a business cycle, Real GDP rises beyond the recovery.
D) a and b
E) a, b, and c
E
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If the expected future inflation rate decreases, then
A) aggregate demand increases. B) short-run aggregate supply increases. C) aggregate demand decreases. D) long-run aggregate supply decreases.
Household savings rates:
A. vary enormously across countries. B. are remarkably similar across countries. C. seem to be similar for countries within the same continent. D. are impossible to compare across countries.
All of the following except one are reasons the demand deposit multiplier may be smaller in practice than in theory. Which one is not a valid reason?
a. Banks do not want to hold excess reserves. b. Some of the currency generated when bonds are purchased ends up outside of the banking system. c. Banks sometimes hold more than their required reserves. d. An open market operation may change the public's holding of cash. e. All of the above are not valid reasons.
Which of the following is a normative economic statement?
A. An increase in corporate income taxes will cause the unemployment rate to increase. B. Teenage unemployment is too high for the United States. C. The costs of medical care are increasing faster than the incomes of U.S. citizens. D. Teenage unemployment is over 12 percent today.