In the income-expenditure model, inventories are:
A. constantly changing and provide insight into the future of the economy.
B. a long-run event that aids forecasters in understanding where long-run real GDP is.
C. fixed and therefore provide little insight into the direction of the economy.
D. often positive, suggesting that additions to inventory stocks are a long-run goal.
A. constantly changing and provide insight into the future of the economy.
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Describe the four distinct tools of policy that the Federal Reserve can use to influence the money supply. How would the Fed use each of these tools to either increase or decrease the money supply?
What will be an ideal response?
Costs that are not obvious at the start of a project are
a. variable costs b. semivariable costs c. fixed costs d. indirect costs e. hidden costs
If aggregate expenditures exceed GDP in a private closed economy:
A. leakages will exceed injections.
B. planned investment will exceed saving.
C. unplanned investment in inventories will occur.
D. saving will exceed planned investment.
Supply-side economists argue that
A) lower tax rates always lead to lower tax revenues. B) higher tax rates lead to increased productivity. C) lower tax rates sometimes lead to increased tax revenues. D) lower tax rates lead to a drop in real Gross Domestic Product (GDP).