The main belief of the monetarist model is that
A) workers and firms have rational expectations.
B) the quantity of money should be increased at a constant rate.
C) productivity shocks explain fluctuations in real GDP.
D) the economy is slow to adjust to sticky wages and prices.
Answer: B
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
An upward-sloping straight line exhibits a direct relationship between two variables
a. True b. False Indicate whether the statement is true or false
If someone has a high willingness to take on situations with risk, he is considered:
A. low-risk. B. high-compensation. C. risk-seeking. D. risk-averse.
In a certain economy, the components of aggregate spending are given by: C = 500 + 0.8(Y - T) - 300rI = 200 - 400rG = 200NX = 10T = 150 Given the information about the economy above, which expression below also states aggregate expenditure?
A. [910 - 700r] B. [910 - 700r] + 0.8Y C. [790 - 700r] D. [790 - 700r] + 0.8Y