Jason can maximize his satisfaction by allocating time among market work, nonmarket work, and leisure so that the final marginal utilities per hour spent in each activity are identical
a. True
b. False
A
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Potential output in an economy decreases as the supply of labor decreases or the capital stock increases
Indicate whether the statement is true or false
An open market purchase of securities by the Fed leads to all of the following EXCEPT
A) an initial increase in excess reserves. B) an increase in bank lending. C) a decrease in the quantity of money. D) an increase in banks' reserves. E) an increase in the monetary base.
What is the largest component of spending in the United States?
A) consumption spending B) investment spending C) government purchases D) net investment spending
According to real business cycle models
A) the economy is normally operating below the natural rate of unemployment. B) unexpected changes in monetary policy are the major source of fluctuations in real GDP. C) the economy is normally at potential GDP. D) the long-run Phillips curve is negatively sloped.