Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; potential
C. higher; higher
D. lower; higher
Answer: B
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Monetary policy refers to the actions taken by the Treasury Department to set the level of the money supply
Indicate whether the statement is true or false
Last year your job at the university cafeteria paid you $9 an hour and the price of a music download was $1.00 . This year your cafeteria job pays $9.90 per hour and download costs $1.10 . You are clearly
a. worse off because of inflation. b. worse off because the download is now relatively more expensive. c. better off because your wage rate went up. d. better off because the download now costs less work.
Under what circumstances does purchasing-power parity explain how exchange rates are determined, and why is it not completely accurate?
Not having to pay for a good leads to:
A. oversupply. B. overconsumption. C. underconsumption. D. irrational consumption.