For any given increase in spending that is not directly caused by an increase in income, the impact on equilibrium GDP is greater than the initial spending increase
Indicate whether the statement is true or false
TRUE
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Which of the following statements is true?
A) The Fed can influence the money supply in the economy by influencing the required amount of reserves. B) The Fed can reduce the growth of money supply by increasing the growth in bank reserves. C) The rate of inflation in the long run is equal to the rate of growth of real GDP minus the rate of growth of money supply. D) The Fed has the power to dictate the volume of deposits held with commercial banks.
Marissa walks into a convenience store to buy something to drink. As she stares into the cooler, her opportunity cost of choosing a Gatorade is:
A. obvious. It's the value she places on whatever drink she would choose if she didn't pick Gatorade. B. distant and abstract. It's the value she places on whatever drink she would choose if she didn't pick Gatorade. C. obvious. It's the value she places on all the other drinks she could choose instead of Gatorade. D. distant and abstract. It's the value she places on all the other drinks she could choose instead of Gatorade.
Falling output, in the short run, could be due to:
A. an increase in short-run aggregate supply. B. a reduction in aggregate demand. C. an increase in long-run aggregate supply. D. an increase in aggregate demand.
Monopolistic competition is characterized by:
A. Rothschild indices that are close to zero. B. concentration ratios that are well above zero. C. employing labor from a perfectly competitive labor market. D. differentiated products.