If prices are fixed, when aggregate planned expenditure exceeds real GDP, then
What will be an ideal response?
inventories decrease, signaling firms to increase production and increase real GDP
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Suppose the Chinese government regulates the price of food and forbids firms from setting a higher price. In this case the government is setting a
A) price floor. B) price ceiling. C) quota. D) tax.
According to the expectations theory, what will be the interest rate on a three-year bond if a one-year bond has an interest rate of 2% and is expected to have an interest rate of 3% next year and 5% in two year?
Report your answer using a percentage with two decimal places.
Over the last 30 years, the value of the dollar has:
A. fluctuated significantly. B. changed little. C. decreased steadily. D. increased steadily.
Josh wants to go to the football game this weekend, but he has a paper due on Monday. It will take him the whole weekend to write the paper. Josh decides to stay home and work on the paper. According to the Scarcity Principle, the reason Josh doesn't go to the game is that:
A. writing the paper is easier than going to the game. B. Josh prefers schoolwork to football games. C. Josh can't go the game and finish the paper. D. going to the game won't be fun.