Which of the following statements describes what most likely occurred in this economy?
a. A decrease in consumer optimism shifted AD1 to AD2.
b. A recessionary gap resulted due to the shift from RGDPNR to RGDP2.
c. There was a temporary positive shock to demand-side forces.
d. Unemployment rose above the natural rate of unemployment.
c. There was a temporary positive shock to demand-side forces.
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Refer to the above table. The table gives the combinations of real disposable income and real consumption for a college student for a year. What is the value of the marginal propensity to consume?
A) 0.7 B) 1 C) 0.3 D) 0
Inflation can occur under conditions of full employment
A) only if the central bank continues to inject money into the economy and the agents' expectations of inflation are supported by the bank's activities. B) only if the central bank continues to inject money into the economy. C) only if the central bank continues to withdraw money from the economy. D) only if the central bank continues to inject money into the economy and all agents expect that inflation will not occur. E) only if the central bank fails to inject money into the economy.
Which of the following are the most frequently utilized tools of fiscal policy in the United States?
a. Indirect business taxes b. Corporate income taxes c. Inheritance taxes d. Personal income taxes
Gabby flips a fair coin and it comes up heads. Gabby suffers from the hot-hand fallacy if:
A. she thinks the coin will come up heads on the next flip because it came up heads on the previous flip. B. she thinks the coin will come up tails on the next flip because it came up heads on the previous flip. C. she thinks the coin is less likely to come up heads because it came up heads on the previous flip. D. she thinks the coin is equally likely to come up heads or tails on the next flip.