Which statement most accurately captures the state of money today?
A) Money today includes currency, bank deposits and checks.
B) Money today includes currency and checks but not bank deposits.
C) Money today includes bank deposits and currency but not checks.
D) Money today includes bank deposits and checks but not currency.
E) Money today includes checks and credit cards.
C
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
The per-worker production function in the Solow model assumes
A) constant returns to scale and increasing marginal productivity of capital. B) constant returns to scale and diminishing marginal productivity of capital. C) increasing returns to scale and diminishing marginal productivity of capital. D) decreasing returns to scale and diminishing marginal productivity of capital.
If labor supply of unskilled workers is perfectly inelastic, then
A. the labor supply curve of unskilled workers is vertical at the total number of unskilled workers in the market. B. firms face an increasing marginal cost of hiring unskilled labor. C. firms face a horizontal value of marginal product of employment curve. D. workers will supply more hours of labor to the market when wages increase. E. the labor supply curve of unskilled workers is horizontal at the market-clearing wage.
In the market for euros, a decrease in the relative safety of U.S. investments tends to
A. increase excess supply. B. decrease equilibrium price. C. increase equilibrium price. D. cause no change in equilibrium price.