In a business cycle boom, we expect an unusually ________ proportion of actual income to be transitory, thus an unusually ________ MPC operating in the short run, which ________ the income multiplier for the short run
A) high, low, reduces
B) high, low, increases
C) high, high, reduces
D) low, low, increases
E) low, high, reduces
A
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Risk premiums on corporate bonds tend to ________ during business cycle expansions and ________ during recessions, everything else held constant
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
The ______ is found at the point at which the market supply and market demand curves intersect.
a. equilibrium surplus b. equilibrium curve c. market equilibrium d. individual equilibrium
Consumption possibilities, during a given time period, refer to the
A. Amount by which a country can expand its production possibilities by engaging in international trade. B. Maximum amount that a country can produce if it imports and does not export. C. Maximum amount of imported goods and services that a country can consume. D. Alternative combinations of goods and services that a country could consume in a given period of time.
Some economists have proposed a new definition of money that would better track money demand. One such measure is the MZM or "money zero maturity." What kind of items will be included in this measure?
A) Assets that have no maturity such as cash, checking accounts, and shares of stocks. B) Assets that can be converted to cash with zero penalty and securities that are issued by the U.S. government since these are virtually risk free. C) Any deposits that do not have specified maturity terms, just as long as these deposits are fairly liquid and are used by consumers to pay for transactions. D) Liquid accounts held by the public, regardless of whether they are classified as M1 or M2 and the reserves of banks that earn no interest since these could be used to create money.