One lesson history has taught us is, if governments tax and over-regulate currencies and banks:
a. The private sector usually finds a way to circumvent these taxes and restrictions.
b. Governments have been very effective at controlling the pace at which currencies have developed worldwide.
c. Commerce rarely follows community.
d. To gain widespread trust and usage, currencies must be backed by precious metals.
.A
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
What information is provided by the aggregate demand curve?
What will be an ideal response?
The Fed's low short-term interest rate policy of 2002 to 2004 encouraged decision makers to
A) make large down payments when purchasing housing. B) borrow more and increase their purchases of housing. C) borrow less and reduce their purchases of housing. D) purchase housing only if it could be financed with a 30-year, fixed interest-rate mortgage.
Economic cost differs from accounting cost because accountants do not consider implicit costs.
Answer the following statement true (T) or false (F)