The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier.
B. self-correcting property.
C. long-run equilibrium property.
D. short-run equilibrium property.
Answer: B
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The opportunity cost of holding excess reserves will be lower at an 8 percent federal funds rate in comparison to a 10 percent federal funds rate
a. True b. False Indicate whether the statement is true or false
Which of the following examples are substitutes in production?
a. shoes; polish b. 2 percent milk; cream c. baseballs; footballs d. crude oil; motor oil
In GDP, the largest dollar amount is
a) consumer spending b) rental payment c) net exports of goods and services d) gross private domestic investment e) government purchase of goods and services
An increase in government expenditures is an example of expansionary fiscal policy.
Answer the following statement true (T) or false (F)