If planned aggregate expenditure is greater than total production
A) actual inventories will equal planned inventories.
B) the economy is in equilibrium.
C) firms will experience an unplanned increase in inventories.
D) GDP will increase.
D
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If the required reserve ratio is 100 percent, could the Federal Reserve still change the money supply with open market operations? Explain whether they could or could not
What will be an ideal response?
If the MPC is 0.75, and the government cuts spending by $100b, the overall effect on GDP will be:
A. a decrease of $400b. B. an increase of $250b. C. a decrease of $250b. D. an increase of $400b.
The efficient markets hypothesis implies
a. that all stocks are fairly valued all the time and that no stock is a better buy than any other. b. that all stocks are fairly valued all the time, but that some stocks may be better buys than other. c. that some stocks may be better buys than others and stock experts can determine which ones. d. that no stock is efficiently valued.
The quality adjustment bias of the CPI refers to the failure of statisticians to:
A. allow for the possibility that consumers switch stores at which they shop. B. allow for the possibility that consumers switch from products whose prices are rising. C. take into account improvements in goods and services. D. take into account price changes in goods and services.