Aggregate supply grows over time because of growing consumer and government spending.
Answer the following statement true (T) or false (F)
False
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If there is a dollar-for-dollar direct expenditure offset, then
A) increases in aggregate demand will also increase long-run aggregate supply. B) increases in government spending will not increase aggregate demand. C) increases in aggregate demand will increase the price level, but leave real output unchanged. D) increases in aggregate demand will increase real output, but leave the price level unchanged.
Minimum wage laws
a. benefit all unskilled workers. b. create unemployment, but if demand is relatively elastic, the unemployment effects will be minor. c. may help the nonpoor, such as teenagers from wealthy families. d. reduce poverty by reducing unemployment.
Which of the following will both make people buy more?
a. wealth and interest rates rise. b. wealth rises and interest rates fall. c. wealth falls and interest rates rise. d. wealth falls and interest rates fall.
Table 14.1Monetary Aggregates of the U.S. Financial SystemItemAmountCash held by public$250 billionTransactions deposits$1,000 billionRequired reserves$150 billionExcess reserves$0 billionU.S. bonds held by public$1,000 billionAssume an original balance sheet: The level of total reserves in Table 14.1 is
A. $1,150 billion. B. $400 billion. C. $150 billion. D. $250 billion.