Suppose real GDP is $13 trillion and potential real GDP is $13.5 trillion. If Congress and the president increase government purchases by $500 billion, then the economy will be brought to equilibrium at potential real GDP
Indicate whether the statement is true or false
FALSE
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The main source of economies of scale is
A) better management. B) constant returns to plant size. C) specialization. D) long-run cost curves eventually sloping downward. E) increases in the labor force not matched by increases in the plant size.
Slowdonia's current growth rate of real GDP per person is 2 percent a year. How long will it take to double real GDP per person?
A) half a year B) approximately 10 years C) 28.6 years D) 35 years
The vicious cycle of poverty is characterized by
a. low factor mobility b. little institutional rigidity c. high capital accumulation d. continual technological change e. all of the above
The Fed has control over the long-term real interest rate provided that three variables remain unchanged. These three variables include all of the following except
A) the expected rate of inflation. B) the default premium. C) term structure effects. D) the short-term real interest rate.