Unplanned inventory increases:
a. tend to result in an increase in income
b. tend to result in an increase in real output.
c. result in an increase in production.
d. signal that demand was weaker than expected.
d
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The figure above shows the market for brooms. If the market is efficient,
A) 0 brooms are produced. B) 600 brooms are produced. C) more than 1000 brooms are produced. D) between 0 and 600 brooms are produced. E) between 600 and 1000 brooms are produced.
To offset the effect of households and firms deciding to hold less of their money in checking account deposits and more in currency, the Federal Reserve could
A) raise the discount rate. B) buy Treasury securities. C) raise the required reserve ratio. D) lower bank taxes.
Which of the following lags reduces the effectiveness of active policy?
a. Preliminary lag b. Accounting lag c. Self-correction lag d. Recognition lag e. Execution lag
If people come together through the political process and agree to pay taxes and make group decisions about the quantity of public goods produced, they can defeat the free rider problem with laws that require people pay taxes to contribute to public goods
a. True b. False Indicate whether the statement is true or false