To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change.
B. increase.
C. decrease.
D. either increase or decrease depending on the relative shifts of AD and AS.
Answer: C
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Which of the following is true of M1? a. It is equal to M2
b. It consists of all near-monies. c. It consists of certificates of deposit. d. It is the broader definition of money. e. It is only a fraction of M2.
For an intertemporal budget constraint concerning saving for retirement, the choice is between present consumption and future consumption.
a. Fungible b. Utility-maximizing c. Intertemporal choice d. Backward-bending
Which of the following would be most likely to improve the standard of living of a less-developed country?
What will be an ideal response?
If P = Q/15 represents market supply for a competitive industry and market demand is given by Qd = 500 - 10P, the equilibrium quantity is:
A. 250. B. 187.5. C. 300. D. 150.