Cost-push inflation is caused by supply shocks like higher oil prices and poor weather conditions
a. True
b. False
Indicate whether the statement is true or false
True
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If Sally Smith creates VCU1 by playing an online game, the effect is to cause the nation's:
a. Monetary base to fall. b. M2 money supply to fall. c. M2 money multiplier to fall. d. Monetary base to remain the same.
Using aggregate supply and demand curves drawn according to the Keynesian view, which of the following will occur if the Fed buys bonds in the open market and the economy is below full employment?
A. Aggregate demand will shift to the left and the unemployment rate will rise. B. Aggregate demand will shift to the right and the unemployment rate will fall. C. Aggregate demand will shift to the left and the price level will remain unchanged. D. Aggregate demand will shift to the right and the price level will fall.
Some people advocate price ceilings in certain markets because they seek to
A. expand the total of consumer and producer surplus which the market generates. B. enhance both efficiency and distribution goals with the price ceiling. C. redistribute welfare from the producer to the consumer even if overall welfare is sacrificed. D. redistribute welfare from the consumer to the producer even if welfare is sacrificed.
Use the following information to answer the next question.C = A + .75(Y - T)A = $900I = $600G = $400T = $400NX = -$200Suppose the equilibrium level of real GDP is represents full employment. What would be the effect of a tax decrease of $100?
A. There will be an inflationary expenditure gap of $75. B. There will be an inflationary expenditure gap of $100. C. There will be a recessionary expenditure gap of $75. D. There will be a recessionary expenditure gap of $100.