Inflationary gaps can be cured by either cutting government expenditures or raising taxes.
Answer the following statement true (T) or false (F)
True
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Which of the following is an equilibrium condition for the goods market?
A) M = kPQ B) Desired saving and desired investment C) Money demand = money supply D) IS = LM
The basic purpose of economic models is to:
a. construct simplifying assumptions about the real world. b. explain reality in all its complexity. c. construct situations where controlled experiments can be carried out. d. provide explanations for, and predictions of the relationship between variables.
Under perfect competition, at the profit-maximizing level of output:
a. price is greater than marginal revenue. b. price is equal to marginal revenue. c. marginal revenue is equal to zero. d. the marginal revenue curve is upward sloping. e. the average revenue curve is upward sloping.
Keynesian economics developed in response to:
a. the Great Depression of the 1930s. b. the inflation following World War II. c. economic growth during the 1950s. d. the Vietnam War. e. the oil embargo in the 1970s.