Which of the following is a correct sequence of events during an expansion?
A. Unemployment rises, income falls, tax revenue falls, unemployment benefits rise, and the budget deficit rises.
B. Unemployment rises, income falls, tax revenue rises, unemployment benefits fall, and the budget deficit falls.
C. Unemployment falls, income falls, tax revenue falls, unemployment benefits rise, and the budget deficit falls.
D. Unemployment falls, income rises, tax revenue rises, unemployment benefits fall, and the budget deficit falls.
Answer: D
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The monetary base consists of
A) currency in circulation and Federal Reserve notes. B) currency in circulation and the U.S. Treasury's monetary liabilities. C) currency in circulation and reserves. D) reserves and Federal Reserve Notes.
In the long run, total spending affects ________, and output is determined by ________.
A. prices; meeting demand at preset prices B. inputs and productivity; prices C. inputs and productivity; total spending D. prices; inputs and productivity
When the Fed lowers the target rate of interest for federal funds, it
A) buys government bonds. B) lowers the discount rate. C) sells government bonds. D) lowers the required reserve ratio.
Suppose the CPI in 1990 is 500, with 1967 as the base year. On average, how much money must be spent in 1990 to purchase the same quantity of goods and services that could have been bought with $10 in 1967?
A. $50 B. $5 C. $400 D. $500