The investment component of GDP measures spending on
a. financial assets such as stocks and bonds. During recessions it declines by a relatively large amount.
b. residential construction, business equipment, business structures, and changes in inventory. During recessions it declines by a relatively large amount.
c. financial assets such as stocks and bonds. During recessions it declines by a relatively small amount.
d. residential construction, business equipment, business structures, and changes in inventory. During recessions it declines by a relatively small amount.
b
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Taxes may cause deadweight losses because __________.
A) they increase consumer surplus at the expense of producer surplus. B) they transfer purchasing power from buyers to the government. C) they transfer purchasing power from sellers to the government. D) they lower the surplus in the market.
If price were $6, there would be a (shortage or surplus) _____ of _____.
The equation of exchange is an accounting identity that
A. relates the money supply to nominal GDP. B. equates the demand for money with the supply of money. C. relates the money supply to real GDP. D. accounts use to balance assets and liabilities.
If the Fed sells U.S. government securities, the
A. money supply increases, and the money supply curve shifts to the right. B. money supply decreases, and the money supply curve shifts to the left. C. money supply increases, and the money supply curve shifts to the left. D. money supply decreases, and the money supply curve shifts to the right.