An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase
B. increase; increase
C. decrease; decrease
D. increase; decrease
Answer: D
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Correlation means
A) "on the margin." B) the tendency for the values of two variables to move in a predictable and related way. C) other things remaining the same. D) "after this, therefore because of this." E) a natural experiment has been conducted.
Which of the following creates an incentive to increase the amount of an activity?
A) an increase in the marginal cost of the activity and a decrease in the marginal benefit of the activity B) a decrease in the marginal cost of the activity and an increase in the marginal benefit of the activity C) constant marginal cost and constant marginal benefit of the activity D) None of the above create an incentive to increase the amount of an activity.
Suppose that the required reserve ratio is 20 percent and you deposit $50,000 of currency into Comerica Bank
What is the potential increase in deposits in the banking system brought about by your deposit? What is the potential change in the money supply?
One difference between stocks and bonds is that
A) stocks do not involve a promise to repay a purchaser of the stock, while bonds represent a promise to repay the purchase price of the bond. B) stocks represent ownership in companies, while bonds represent ownership in banks. C) stocks are financial securities, while bonds are labor market securities. D) stocks are usually issued in electronic form, while bonds are usually issued in paper form.