Potential GDP is the maximum amount of economic output an economy can sustain at any moment without
A. causing frictional unemployment.
B. decreasing the inflation rate.
C. increasing the inflation rate.
D. raising unemployment levels.
Answer: C
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At the beginning of the year, Tom's Tubes had a capital stock of 5 tube inflating machines. During the year, Tom scrapped 2 old machines and purchased 3 new machines. Tom's gross investment for the year totaled
A) 1 machine. B) 2 machines. C) 3 machines. D) 6 machines.
If the exchange rate between the dollar and Japanese yen is below the equilibrium exchange rate, there will be a ________ of dollars, and the exchange rate will ________
A) surplus; fall to the equilibrium level B) shortage; change only when the supply curve shifts leftward C) shortage; rise to the equilibrium level D) surplus; rise to the equilibrium level
As a patent in a the pharmaceutical industry expires, the market for these drugs
a. Can now be categorized as a competitive market b. Can now be categorized as a monopolistic market c. Was and is still a monopolistic market d. Was and is still a competitive market
One way in which politicians have tried to cut federal spending and borrowing was to refuse to
a. lower the legal debt limit. b. default on Treasury bonds. c. raise the legal federal debt limit. d. issue additional Treasury bonds.