Economic growth is a sustained expansion of production possibilities measured as the increase in ________ over a given period
A) capital per person
B) population
C) real GDP
D) real GDP per person
E) the standard of living
C
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The quantity theory of money:
A) assumes that the ratio of money supply to nominal GDP decreases over time. B) assumes that the ratio of money supply to nominal GDP increases over time. C) is a representation of how a change in money supply affects the price level in an economy. D) is an exact representation of how the economy behaves in the long-run.
An outside lag is the time period it takes economists to formulate a stabilization policy
Indicate whether the statement is true or false
When the marginal product of labor rises
A) the marginal cost of production will exceed the average total cost. B) the marginal cost of production also rises. C) the average total cost of production also rises. D) the marginal cost of production falls.
If demand for new investment goods weakens and firms revise downward their expectations of future sales, the coupling effects of the accelerator and the income multiplier
a. work against each other b. create no loss in the economy as the effects cancel each other out c. create the downward phase of the business cycle d. create the upward phase of the business cycle e. explain why real business cycle theorists believe the economy is unstable and cyclical