If the economy is currently in equilibrium at a level of GDP that is above potential GDP, which of the following would move the economy back to potential GDP?
A) a decrease in interest rates
B) a decrease in wealth
C) a decrease in the value of the dollar relative to other currencies
D) an increase in business confidence
B
You might also like to view...
In a two-period model with production, an increase in the world real interest rate
A) increases domestic output and increases the current account surplus. B) increases domestic output and decreases the current account surplus. C) decreases domestic output and increases the current account surplus. D) decreases domestic output and decreases the current account surplus.
It is possible for a team member to monitor the activities of all other team members without affecting his/her own productivity
Indicate whether the statement is true or false
Government often finds it difficult to cope with externalities because
a. costs and benefits are difficult to assess in monetary terms. b. taxes and subsidies are ineffective in equating MSC and MSB. c. government has no authority to impose fines for air and water pollution. d. marginal private cost curves cannot be shifted.
Which of the following is true of the law of diminishing marginal utility?
a. The additional utility that a person receives from consuming the first unit of a good will be more than the additional utility received from consuming the fifth unit of that same good. b. The additional utility that a person receives from consuming the first unit of a good will be less than the additional utility received from consuming the fifth unit of that same good. c. The additional utility that a person receives after consuming the first unit of a good will be equal to zero. d. The additional utility that a person receives from consuming the first unit of a good will be equal to the additional utility received from consuming the fifth unit of that same good.