In the classical model, the government needs to worry about total spending
a. True
b. False
B
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Which of the following best summarizes the importance of business failure and the central idea of "creative destruction in a market economy"?
What will be an ideal response?
Refer to Table 9-2. In Year 2, if the supply of money measured by M2 was $1,000 billion, then the components of M2 not shown in the table must have totaled
A) less than $250 billion. B) $250 billion. C) $300 billion. D) $450 billion.
If the MPC is .50 and the equilibrium GDP is $40 billion below the full-employment GDP, then the size of the recessionary expenditure gap is:
A. $40 billion. B. $20 billion. C. $60 billion. D. $80 billion.
In the basic closed-economy ISLM model, the money demand is a function of
A) output. B) money supply. C) interest rates. D) both A and C.