Which of the following have to be in equilibrium for the economy to be in equilibrium?
A) the money market only
B) the goods market only
C) the output and asset markets
D) the savings and investment markets
E) the goods and output markets
C
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Profits
A) are a cost of doing business because they are payments to others. B) are not a cost of doing business because they are owed to resource owners. C) are not a cost of doing business because they are often zero or negative. D) are a cost of doing business because entrepreneurs would not incur the risk of starting a business if they didn't expect to earn profits.
The certainty equivalent is less than the expected value of a gamble when tastes are risk averse.
Answer the following statement true (T) or false (F)
The Federal Reserve responded to the 2008 financial crisis in several ways. Which of the following is one of the ways the Fed responded?
A) The Fed helped Citibank to acquire General Motors and Chrysler. B) The Fed lent investment banks Treasury securities in exchange for mortgage-backed securities. C) The Fed lowered the required reserve ratio on demand deposit accounts in order to increase the amount of bank reserves. D) The Fed banned investment banks from obtaining discount loans.
In short-run equilibrium, the quantities supplied and demanded of Real GDP can be less than or greater than Natural Real GDP
Indicate whether the statement is true or false