An expectation that encourages people to behave in a certain way
a. free enterprise
b. traditional economy
c. incentive
d. safety net
e. socialism
Ans: c. incentive
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On the graph above, consider a point A on the aggregate supply curve and above the aggregate demand curve. At this point, ________
A) quantity demanded equals output, but the inflation rate will fall, so output will rise B) quantity demanded is greater than quantity supplied, so the inflation rate will rise C) output is greater than the quantity demanded, so output will fall D) the aggregate demand curve will shift to the right until quantity demanded is equal to quantity supplied E) none of the above
Why is the time lag for making fiscal policy changes longer than for making monetary policy changes?
Identify the correct reason behind the negative slope of the aggregate demand curve
a. Declining marginal ability b. Nature of opportunity costs c. Inverse relationship between price level and real GDP demanded. d. Overall price level
Money is created through the banking processes of taking deposits and making loans if
A) the banks require individual depositors to hold "reserves." B) the banks require individual borrowers to hold "reserves." C) paper deposit receipts are not acceptable means of payment. D) paper deposit receipts are accepted as a means of payment.