Without a central bank, such as the Federal Reserve System, banks, if left to themselves, are likely to
a. hold greater excess reserves than socially desirable during a recession
b. create insufficient money when the economy is at full employment
c. engage in money creation opportunities when the economy is in a recession
d. hold no reserves when the economy is in a recession
e. lend the least possible amount when the economy is at full employment
A
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Aggregate demand and aggregate supply must be combined to determine the price level and the "real" GDP
Indicate whether the statement is true or false
When the government controls the price of a product, causing the market price to be above the free market equilibrium price,
A) all producers gain. B) both producers and consumers gain. C) only consumers gain. D) some, but not all, sellers can find buyers for their goods.
Rapid economic growth, stable prices and __________ are the three important macroeconomic goals about which most economists agree
a. an unemployment rate of zero b. zero inflation c. full employment d. a high exchange rate e. low interest rates
Public choice refers to how
a. much publicity a government-sponsored project receives b. members of government make choices that promote their own self-interest (to keep their jobs) c. the public makes choices about what types of goods to buy d. private decisions often end up becoming public e. supply and demand curves reflect public opinion