If Libby can produce 20 gallons of beer or 5 gallons of wine per hour, her opportunity cost of one gallon of beer is 4 gallons of wine.
Answer the following statement true (T) or false (F)
False
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In terms of planning, which of the following is an advantage of the long run over the short run?
a. flexibility b. complexity c. inelasticity d. frequency
When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
As measured, GDP omits which of the following? i. Illegal sales of goods and services ii. Changes in the amount of leisure time iii. Household production of goods and services
A) i only B) i and ii C) ii and iii D) i and iii E) i, ii, and iii
In a simple Keynesian model, a decrease in income leads to a decrease in
A) consumption. B) investment. C) the price level. D) the money supply.