If a country devotes its resources to acquiring more physical capital it will:
A. not face the investment trade-off.
B. have more GDP per capita in the future.
C. have more current consumption.
D. not have less overall GDP in the future.
B. have more GDP per capita in the future.
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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.
According to the law of demand, a demand curve:
A. Is upward sloping. B. Is downward sloping. C. Is a horizontal, or flat, line. D. Can slope either upward or downward based on consumer behavior.
If a bond dealer sells a government bond to the Fed for $100,000, and the reserve ratio is 10 percent, then the bank that receives a $100,000 deposit from the dealer can expand its loans by ________, and the money supply can increase by as much as ________.
A. $90,000; $900,000 B. $80,000; $800,000 C. $90,000; $1,000,000 D. $10,000; $100,000
Suppose that inventories are rising. We could expect that, in the future:
A. Real GDP will likely increase B. Real GDP will likely decrease C. We can't predict what will happen to real GDP D. Firms will raise prices of their goods and services