When there are sustained increases in real GDP over time, we say that the economy is undergoing:
A. economic stagnation.
B. a recession.
C. economic growth.
D. massive changes in productive capacity.
Answer: C
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Which of the following is NOT a reason why people are motivated to hold money?
A) precautionary demand B) liability demand C) asset demand D) transactions demand
Which of the following is true about inflation?
a. Inflation promotes social harmony by uniting people against the government. b. Inflation is more damaging if it is anticipated. c. Accurate anticipation of inflation is possible for everyone who is well informed about economic events. d. Those who lend money at a rate below the rate of inflation suffer economic losses. e. If people accurately anticipate inflation, their actions will prevent it.
The massive shift of population and industry out the large central cities from the late 1940s through the 1960s was caused by
A. terrorist attacks. B. the mechanization of agriculture. C. suburbanization. D. the widespread use of electricity. E. fear of nuclear war.
Ignoring any supply-side effects, suppose the government is considering cutting taxes by $100 billion or increasing government expenditures on goods and services by $100 billion. Then
A) both policies would increase aggregate demand but the increase in government expenditure has a smaller effect. B) the tax cut would increase aggregate demand and the increase in government expenditure would decrease aggregate demand. C) the tax cut would decrease aggregate demand and the increase in government expenditure would increase aggregate demand. D) both policies would increase aggregate demand by the same amount. E) both policies would increase aggregate demand but the tax cut has a smaller effect.