Monetarists can be described as a group of macroeconomists who
A) emphasize the importance of the federal government's involvement in the economy to dampen the harmful effects of the business cycle.
B) emphasize the importance of the money supply as a determinant of macroeconomic activity.
C) tend to view government spending and taxation policy as the chief means of stabilizing the economy.
D) feel that money should not be created in the private banking system, but only by government.
B
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You have the following information on personal consumption expenditures (C) and disposable income (Yd):
Year C Yd 1 300 400 2 500 700 a. Compute the marginal propensity to consume. b. Compute the amount of savings for years 1 and 2. c. Compute the marginal propensity to save.
A downturn in the economy occurs when real GDP
a. declines, inflation moderates, and full employment exists b. declines, inflation occurs, and unemployment emerges c. declines, inflation moderates, and unemployment emerges d. is sustained at a relatively high level, but inflation moderates, and unemployment emerges e. is sustained at a relatively high level with full employment, but inflation moderates
If the full-employment level of real GDP is greater than the equilibrium level of real GDP, the nation would be experiencing a(n)
A. rising prices. B. recessionary gap. C. demand-pull inflation. D. inflationary gap.
Refer to the information provided in Figure 2.6 below to answer the question(s) that follow.
Figure 2.6Refer to Figure 2.6. Which of the following will shift an economy's production possibility frontier from ppf1 to ppf2?
A. a change in consumers' tastes B. an increase in production efficiency C. an increase in the economy's capital stock D. a decrease in unemployment