Which statement best describes the U.S. real GDP?
a. Over the long term, U.S. real GDP have remained relatively steady.
b. Over the long term, U.S. real GDP have increased modestly.
c. Over the long term, U.S. real GDP have decreased slightly.
d. Over the long term, U.S. real GDP have increased dramatically.
d. Over the long term, U.S. real GDP have increased dramatically.
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In the figure above, an increase in the price of a bag of potato chips would result in the budget line
A) making a parallel shift toward point a. B) making a parallel shift toward point c. C) becoming flatter. D) becoming steeper.
For investors, commercial paper is a close substitute for
A) U.S. Treasury bills. B) U.S. Treasury bonds. C) corporate bonds. D) municipal bonds.
The country of Zincosa is in an economic slump with a very high unemployment rate. The stock market has crashed, and business confidence is at a low. Interest rates have fallen to 0.05, and the economy is in a liquidity trap. Facing such a crisis, the central bank of the country decides to purchase billions of dollars in bank debt and securities. Which of the following factors would most likely
have influenced the central bank to take such a step? a. The crash of the stock market b. A high rate of inflation c. A low rate of inflation d. The low interest rates
The desired tax cut to close a GDP gap is given by
A. Desired fiscal stimulus × MPC. B. Desired fiscal stimulus ÷ MPC. C. AD shortfall × MPS. D. AD shortfall ÷ MPC.