Which of the following can eliminate a recessionary GDP gap, ceteris paribus?
A. An increase in saving.
B. A decrease in government spending.
C. An increase in consumption expenditure.
D. A decrease in investment.
Answer: C
You might also like to view...
If the Fed sells government securities, in the short run the nominal interest rate ________ and the real interest rate ________
A) rises; does not change B) rises; rises C) does not change; rises D) falls; falls E) rises; falls
The costs of determining who to bargain with are called
A) search costs. B) collectivization costs. C) negotiation costs. D) monitoring and enforcement costs.
Suppose wages in the market for plumbers increase. Some plumbers start taking on extra plumbing jobs while others cut back on the number of hours they work. What could explain this?
What will be an ideal response?
The Solow model is used to explain ________
A) why some economies experience higher rates of growth than others B) the relationship between price and quantity demanded C) the relationship between the rate of inflation and the rate of unemployment D) the notion of opportunity cost