One of the components of the consumption function is induced consumption and this consumption is induced by changes in the
a. price level
b. level of income
c. interest rate
d. level of investment
e. level of saving
B
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Specialization of labor makes sense only if there is some means of exchange.
Answer the following statement true (T) or false (F)
Using Taylor's rule, when the equilibrium real federal funds rate is 2 percent, there is no output gap, the actual inflation rate is zero, and the target inflation rate is 2 percent, the nominal federal funds rate should be
A) 0 percent. B) 1 percent. C) 2 percent. D) 3 percent.
If supply increases and demand decreases, the new equilibrium price will be ________ and the new equilibrium quantity will be ________.
A. lower; lower B. higher; uncertain C. lower; uncertain D. higher; higher
Aggregate expenditure equals
a) C+I+G+X-M b) C+I+G+X+M c) C+I+G d) C+I+G+X