Refer to the information provided in Figure 23.10 below to answer the question(s) that follow.
Figure 23.10Refer to Figure 23.10. Unplanned inventories increase and output decreases when aggregate output is
A. $0.
B. $500 million.
C. $1,000 million.
D. > $1,000 million.
Answer: D
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What actions should the Fed take if it believes the economy is about to fall into recession?
What will be an ideal response?
One problem with fiat money, as compared to commodity money, is that: a. more resources are used to create fiat money
b. there is frequently too little fiat money available. c. there is a greater potential for inflation with fiat money. d. fiat money must be turned in to the government to receive the commodity on which it is based. e. fiat money is less divisible than commodity money.
What is the difference between accounting profit and economic profit?
a. They are the same thing. b. They are only different if the accountant makes a mistake. c. Accounting profit is usually smaller than economic profits. d. Accounting profit makes no allowance for several implicit costs, including equity capital, while economic profit takes these costs into account.
Which of the following will reduce the price level and real output in the short run?
a. an increase in government purchases. b. an decrease in oil prices c. a decrease in the money supply d. technical progress