In a free market there are significant restrictions on how a good or service can be produced or sold
Indicate whether the statement is true or false
FALSE
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Specific tariffs are collected as
A) fixed amounts of money per unit traded. B) a percentage of the price of the product. C) a percentage of the quantity of imports. D) All of the above.
Suppose Richard Branson withdraws $5 million from his checking account at Bank of America. If the required reserve ratio is 25%, what is the maximum change in deposits in the banking system?
A) -$25 million B) -$20 million C) -$5 million D) -$1.25 million
Cyclical unemployment is a problem because
a. it reflects lost output b. workers are not compensated have no income support at all while they are unemployed c. it will never reach zero d. cyclically-unemployed individuals do not have the skills needed for available jobs e. we do not know how to reduce it