If the price level does not fall or only falls very slowly, then the result will be a prolonged period of
a. inflation whenever supply increases.
b. production below potential GDP.
c. production above potential GDP.
d. rapid price increases when demand changes.
b
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Every society faces economic trade-offs. This means
A) not everyone can have enough goods to survive. B) some people live better than others do. C) society's output cannot be made available to all. D) producing more of one good means less of another good can be produced.
Banks' views of the economy change from confidence to caution when they expect
a. wage rates to fall b. employment to increase c. consumer spending to fall d. a recession to occur e. economic expansion
Compensating wage differentials explain some income differences.
Answer the following statement true (T) or false (F)
If the marginal propensity to save is 0.1 and government spending is raised by $5 billion, then total aggregate spending will rise by:
A. $500 million. B. $5 billion. C. $10 billion. D. $50 billion.