With crises caused by macroeconomic imbalances,
A) it is usually difficult to avoid a recession.
B) austerity programs are not needed.
C) expansionary policies can be used to correct the crisis.
D) the money supply should be increased.
A
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If disposable income = $200 billion and the APS = 0.9, then
A) saving = $90 billion. B) saving = $45 billion. C) saving = $180 billion. D) saving cannot be determined.
Unanticipated expansionary monetary policy will increase economic growth and push inflation upward while lowering real interest rates. This will cause
a. an increase in the demand for foreign currencies and a decline in the foreign exchange value of the dollar. b. a decrease in the demand for foreign currencies and a decline in the foreign exchange value of the dollar. c. an increase in the demand for foreign currencies and an increase in the foreign exchange value of the dollar. d. a decrease in the demand for foreign currencies and an increase in the foreign exchange value of the dollar.
Economists defend brand names as useful to consumers because brand names
a. provide consumers with information about quality when quality cannot easily be judged in advance of purchase. b. give firms a financial incentive to maintain the high quality associated with their brand name. c. convince consumers to spend more for products nearly identical to generic versions. d. Both a and b are correct.
Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher