The smallest (in terms of dollar value) component of our M1 money supply is
a. demand and other checkable deposits
b. currency
c. travelers' checks
d. money market accounts
e. savings accounts
C
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Which of the following is a basic difference between the classical model and the Keynesian model in which the Keynesian short-run aggregate supply curve exists?
A. The classical model uses real GDP, while the Keynesian model uses nominal GDP. B. The classical model assumes that the position of the long run aggregate supply curve is determined by full employment, while the Keynesian model assumes that the long run aggregate supply curve will be to the left of full employment. C. The classical model assumes that the level of real GDP is supply determined, while the Keynesian model assumes that it is demand determined. D. The classical model assumes that the long run aggregate supply curve is vertical, while the Keynesian model assumes the long run aggregate supply curve is horizontal.
Most governments subsidize basic education because
A) there are external costs associated with well educated citizens. B) the marginal social benefit of education is greater than the marginal private benefit. C) of the existence of private schools. D) None of the above answers are correct.
In the above figure, at the equilibrium level of real GDP, there is
A) positive saving. B) negative saving. C) zero saving. D) a negative tax rate.
Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower