If a market economy has a self-correcting mechanism, when output is lower than potential or full-employment output,
a. changes will occur that will automatically guide the economy back to full employment.
b. resource prices will increase.
c. prolonged unemployment such as was experienced during the Great Depression will occur.
d. the economy will fall into a more severe recession.
A
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A consumption-based theory of the determination of the real interest rate is based on the assumption that: a. a rise in the real interest rate will increase current consumption
b. the real interest rate must adjust to make people willing to experience changing consumption levels over time. c. the real interest rate is determined by the supply and demand for investment and is therefore unaffected by consumption decisions. d. the real interest rate must be positive.
The cross-price elasticity of demand is the percentage change in the quantity of good A that is demanded as a result of a percentage change in the price of good B.
Select whether the statement is true or false. A. True B. False
The members of the Federal Reserve Board of Governors are appointed by the Congress of the United States
Indicate whether the statement is true or false
A congress member concerned about ensuring vertical equity in taxation would be most likely to argue for obtaining government revenue through a
a. progressive tax on personal income. b. regressive tax on corporate income. c. sales tax. d. head tax.