Prior to the Great Depression, classical economists believed that a recessionary downturn would be reversed by:
A. higher wages and prices.
B. lower wages and prices.
C. an expansionary monetary policy on the part of the Federal Reserve System.
D. an increase in government spending that would stimulate aggregate demand.
Answer: B
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Operations of the Trading Desk of the Federal Reserve Bank of New York are typically conducted
A) no more often than once per week. B) within a one-hour period during each day. C) no more often than once per month. D) once a year.
The substitution effect of a price increase causes a decrease in the quantity of an inferior good demanded
Indicate whether the statement is true or false
Suppose you were given a gift of a gold mine that generates $1,000 of net income every year, indefinitely. And suppose the equilibrium rate of interest is 5 percent. What is the present value of that gold mine?
a. $20,000 b. $5,000 c. $50,000 d. $500,000 e. $10,000
Since 1970, the U.S. economy has experienced five
A. periods of stagflation. B. deflations. C. periods of high inflation. D. recessions.