If planned aggregate expenditure is less than real GDP, some firms will experience unplanned increases in inventories
Indicate whether the statement is true or false
TRUE
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For a given real interest rate, an increase in inflation makes the after-tax real interest rate
a. decrease, which encourages savings. b. decrease, which discourages savings. c. increase, which encourages savings. d. increase, which discourages savings.
An oligopoly firm is similar to a monopolistically competitive firm in that
A) both firms face the prisoner's dilemma. B) both operate in a market in which there are significant entry barriers. C) both firms have market power. D) both firms are in industries characterized by interdependence of firms.
In 2009, U.S. real GDP decreased by 3 percent and the population grew by 1 percent. Thus, real GDP per person
A) decreased 4 percent. B) increased 4 percent. C) decreased 3 percent. D) increased 2 percent. E) decreased 2 percent.
Which of the following is NOT a function of the Federal Reserve System?
A) providing for check collection and clearing B) holding deposits of member banks C) supervising member banks D) making loans to college students