When the real output of an economy is above its equilibrium output, _____
a. sales increase unexpectedly
b. inventories begin to grow as output remains unchanged
c. businesses will increase their level of production
d. there will be a decrease in the stock of inventories
b
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According to this Application, the recession of 1929 was primarily due to
A) an increase in aggregate supply resulting from European bank collapses. B) a decrease in aggregate supply due to rising gold prices. C) a decrease in aggregate demand resulting from decreases in government spending. D) a decrease in aggregate demand caused by the private sector.
The primary indicator of the Fed's stance on monetary policy is
A) the discount rate. B) the federal funds rate. C) the growth rate of the monetary base. D) the growth rate of M2.
Which of the following would not lead to a change in the supply of chocolate ice cream?
a. a change in productive capacity b. a change in the price of strawberry ice cream c. a change in the price of milk d. a change in the price of chocolate ice cream e. a change in the expected future price of chocolate ice cream
The resources that a taxpayer devotes to complying with the tax laws are a type of
a. consumption tax. b. value-added tax. c. deadweight loss. d. producer surplus.