Suppose the economy is at an equilibrium when C + I + G + X = $12 trillion. If the economy is currently at a real national income level of $14 trillion, then total planned real expenditures
A) exceed real Gross Domestic Product (GDP), and real Gross Domestic Product (GDP) will increase.
B) are less than real Gross Domestic Product (GDP), and real Gross Domestic Product (GDP) will decline.
C) are equal to real Gross Domestic Product (GDP), and there will be no change in real Gross Domestic Product (GDP).
D) are less than real Gross Domestic Product (GDP), and real Gross Domestic Product (GDP) will increase.
Ans: B) are less than real Gross Domestic Product (GDP), and real Gross Domestic Product (GDP) will decline.
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Recent income distribution figures in the United States show
A) slightly more inequality. B) less inequality. C) greater equity. D) less equity.
The Phillips curve represents the Fed's short-run choices between inflation and unemployment
a. True b. False
If the U.S. inflation rate is 3 percent annually and the Japanese inflation rate is 1 percent annually, by what percent would the dollar price of the yen need to change according to purchasing power parity?
a. Appreciate by 2 percent b. Appreciate by 1 percent c. Depreciate by 2 percent d. Appreciate by 3 percent e. Depreciate by 1 percent
The creation of the European Monetary Union in 1999 lowered nominal interest rates in countries like Italy, because:
a. Nations in the European Monetary Union were required to reduce the maturity of their debt issues. b. Each nation now had a solid currency, and the markets knew that the central banks of these nations could create as much money as necessary to repay government debts. c. Markets had more confidence in the European Central Bank than they did in the Bank of Italy. d. All of the above. e. None of the above.