If the GDP measures the current market value of goods and services produced in a given period, how can the final sales of goods and services for that period be a different value?
What will be an ideal response?
If final sales are more than the GDP, it means that some additional goods may have been sold out of inventories. If final sales are less than GDP, it means that some goods currently produced were added to inventories.
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Which of the following statements about the Depository Institutions Deregulation and Monetary Control Act of 1980 is NOT correct?
A) It required all banks to maintain reserve deposits with the Fed. B) It gave member and nonmember banks equivalent access to discount loans. C) It halted the decline in Fed membership. D) It eliminated restrictions on interstate banking for member banks.
If we start to think that Medicare will pay for all of our medical needs as we age, then our likely actions will lead to:
A) a shift in the supply of loanable funds will cause interest rates to rise. B) a shift in the supply of loanable funds will cause interest rates to fall. C) a shift in the demand for loanable funds will cause interest rates to rise. D) a shift in the demand for loanable funds will cause interest rates to fall. E) there will be an excess supply of loanable funds.
An increase in the money supply and a decrease in real GDP at the same time is consistent with the equation of exchange if: a. velocity rises rapidly enough
b. velocity falls rapidly enough. c. the nominal GDP rises rapidly enough. d. the price level falls rapidly enough.
The economy is in equilibrium, TP = TE, and Real GDP is $4,555 billion. The MPC is 0.80, the multiplier is operative, and idle resources exist at each expenditure round. Government purchases rise by $10 billion. As a result, the __________ curve shifts __________, inventory levels unexpectedly __________, business firms ___________ the quantity of goods and services they produce, and Real GDP
__________ by __________. A) TE; downward; fall; increase; rises; $10 billion. B) TP; rightward; fall; decrease; falls; $50 billion C) TE; upward; fall; increase; rises; $50 billion D) TE; downward; rise; increase; rises, $50 billion