Economic models
a. may be insufficient to make numerical predictions.
b. may have untestable conclusions.
c. both of these are true.
d. neither of these are true.
c. both of these are true.
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Explain what happens to the money supply, interest rates, investment spending and GDP when the Fed makes open market bond purchases
What will be an ideal response?
Real GDP is ________ determined in the classical model and ________ determined in the Keynesian model
A) supply; supply B) supply; demand C) demand; supply D) demand; demand
What is the difference between a tariff and a quota?
The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.