Potential output:
A. is purely a physical phenomenon.
B. requires the purchase of new equipment.
C. is related to the long-term growth trend.
D. requires government expenditures.
Answer: C
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The total expenditure on goods and services in a country must be the same as the total income earned from selling goods and services because:
a. the government's annual budget has to balance. b. net exports in an economy is usually zero. c. one sector's expenditures are another sector's income. d. total investment in an economy always equals total saving. e. the sum of consumption spending and saving is zero.
Land used to grow corn could also be used to grow soybeans. Which of the following is true when the farmer plants soybeans and the market price of corn rises?
a. The opportunity cost of producing soybeans decreases. b. The opportunity cost of producing soybeans increases. c. There will be no change in the opportunity cost of producing soybeans. d. The opportunity cost of producing corn increases.
Which of the following describes the Volcker disinflation most accurately?
a. Almost all of the public believed that the Fed would keep money growth low, so unemployment rose less than it would have otherwise. b. Almost all of the public believed that the Fed would keep money growth low, so unemployment rose more than it would have otherwise. c. Much of the public did not believe that the Fed would keep money growth low, so unemployment rose less than it would have otherwise. d. Much of the public did not believe that the Fed would keep money growth low, so unemployment rose more than it would have otherwise.
Refer to the information provided in Table 23.1 below to answer the question(s) that follow. Table 23.1
Refer to Table 23.1. The equation for the aggregate consumption function is
A. C = 80 + 0.95Y. B. C = -80 + 0.45Y. C. C = 80 + 0.9Y. D. C = 80 + 0.75Y.