The primary signal to policy makers that the economy has exceeded potential output is typically:
A. stagflation.
B. unemployment.
C. deflation.
D. inflation.
Answer: D
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When there is a recessionary gap, one is likely to see an increase in overtime work and more hours worked by part-time workers
a. True b. False Indicate whether the statement is true or false
In-kind transfers
a. are cash payments given to the poor from the government. b. are available to citizens of all income levels, but usually only sought by the poor. c. are non-monetary items given to the poor. d. include food stamps, but not housing vouchers or medical services.
Assume an economy with an upward-sloping aggregate supply curve and an MPC of 0.80. An increase in investment spending of $50 billion will most likely increase total income by
A. $200 billion. B. $40 billion. C. more than $200 billion. D. more than $50 billion but less than $250 billion.
An increase in the price of a product will reduce the amount of it purchased because:
A. supply curves are upsloping. B. consumers substitute relatively high-priced for relatively low-priced products. C. the higher price means that real incomes have risen. D. consumers will substitute other products for the one whose price has risen.