In computing GDP, new home construction adds to
a. consumption.
b. investment.
c. government spending.
d. net exports.
b
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Which of the following statements about collusion is true?
a. Collusion is legal in the United States. b. Its overriding goal is to enhance competition and thereby increase profits. c. The greater the number of firms, the less difficult it is to maintain a collusion. d. Collusion never results in benefits for the participants. e. Collusion may help to increase the profits of the participating firms.
The demand curve for a monopolistic competitor is likely to be flatter than that of a monopolist.
Answer the following statement true (T) or false (F)
Expansionary fiscal policy ________ the price level and ________ equilibrium real GDP
A) decreases; increases B) increases; decreases C) increases; increases D) decreases; decreases