Suppose the economy's short-run equilibrium is at a point to the right of Natural Real GDP. Which of the following statements is true?
A) The economy is in an inflationary gap.
B) The economy is in a recessionary gap.
C) The economy is in long-run equilibrium.
D) This situation is actually impossible.
A
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If a corporation's retained earnings are expected to create future profits, the market price of the firm's stock will ________ and create a ________ for stockholders if the stock is sold
A) decrease; capital gain B) decrease; loss of wealth C) increase; loss of wealth D) increase; capital gain
The institution that is responsible for maintaining international monetary stability is the:
A. International Monetary Fund. B. World Bank. C. United Nations. D. International Reserve Bank.
The M1 money supply
a. is composed of assets that reflect the medium of exchange function of money. b. is larger than the M2 money supply. c. includes credit card balances since they are used to purchase things. d. is composed of only currency.
You find that to attract a sufficient number of workers you have to pay them more dollars. Given the price of your output you determine you are paying your workers more in goods than before. Which of the following has risen?
a. The real and nominal value of the wages you pay. b. The real but not the nominal value of wages you pay. c. The nominal but not the real value of the wages you pay. d. Neither the real nor the nominal value of the wages you pay.