Long-term economic ___________ is illustrated in the AD/AS framework by a gradual shift of the aggregate supply curve to the right.
a. growth
b. decline
c. stagnation
d. stagflation
a. growth
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Refer to Table 19-18. What is the GDP deflator in 2016 if 2016 is the base year?
A) 120 B) 118 C) 100 D) 87
Consider the hypothetical information in the table above for potential real GDP, real GDP, and the price level in 2016 and in 2017 if the Federal Reserve does not use monetary policy. If the Fed uses monetary policy successfully to keep real GDP at its potential level in 2017, which of the following will be higher than if the Fed had taken no action?
A) Real GDP and then inflation rate B) real GDP and the unemployment rate C) real GDP and potential GDP D) potential GDP and the inflation rate
What does a "fractional reserve banking system" mean?
(A) One that must keep most deposited money in reserve. (B) One that uses fractional paper currency as well as coins. (C) One that keeps only a small part of customers' deposits on hand. (D) One that is required to report daily deposits to the Federal Reserve.
If a positive permanent supply shock were to occur, the resulting equilibrium would be a:
A. higher level of output at lower prices. B. lower level of output and prices. C. higher level of output and prices. D. lower level of output at higher prices.