In equilibrium, real GDP is equal to
A. C + I + G + X + S.
B. C + I + X - G.
C. C + I + G - X.
D. C + I + G + X.
Answer: D
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Refer to the information above. By accelerator theory, net investment will remain above zero in the long run only so long as
A) expected sales are greater than v* times the capital stock. B) replacement investment is above zero. C) expected sales keep rising. D) expected sales do not fall. E) actual sales fall below expected sales.
Aggregate demand is the sum of total domestic spending by the private sector.
Answer the following statement true (T) or false (F)
The quantity of reserves supplied increases as interest rates rise because
a. the Treasury borrows more at higher interest rates. b. consumers don't want to borrow as much so more money is left in banks. c. as interest rates rise, banks fear losses so they decrease lending. d. banks find it more profitable to loan out excess reserves to other banks.
The demand for most products varies directly with changes in consumer incomes. Such products are known as:
A. inferior goods. B. competitive goods. C. complementary goods. D. normal goods.