The higher the interest rate, the greater the preference for liquidity
a. True
b. False
Indicate whether the statement is true or false
False
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A change that shifted the long-run aggregate supply curve to the right would also shift the short-run aggregate supply curve to the right
a. True b. False Indicate whether the statement is true or false
If productivity growth is 2 percent and inflation is 5 percent, on average, nominal wage increases will be:
A. 5 percent. B. 3 percent. C. 2 percent. D. 7 percent.
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.
Suppose real GDP is $12.1 trillion and potential GDP is $12.6 trillion. To move the economy back to potential GDP, Congress should
A) lower taxes by an amount less than $500 billion. B) raise government purchases by $500 billion. C) raise government purchases by more than $500 billion. D) lower taxes by $500 billion. E) lower government purchases by $500 billion.