A year-long drought that destroys most of the summer's crops would be considered a:
A. short-run supply shock.
B. long-run demand shock.
C. long-run supply shock.
D. short-run demand shock.
Answer: A
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What is "underground production"? Is it included in GDP?
What will be an ideal response?
Suppose there currently is an inflationary gap. What could the government do to bring the overall price level down?
A) nothing B) Reduce government spending. C) Increase government spending. D) Reduce the nation's aggregate supply.
What is a good historical example of when the Fed created a recession to reduce inflation expectations?
a. In the early 1980s b. In the early 1960s c. During the Great Depression d. In the late 1920s e. During World War II
Economies of scope are present when a bank also sells insurance and provides brokerage services for stocks and bonds.
Answer the following statement true (T) or false (F)