When the Fed increases the federal funds rate,
A) there is no effect on investment because investment depends on the real interest rate.
B) the real interest rate falls, and investment increases.
C) the real interest rate rises, and investment decreases.
D) the real interest rate is unaffected, but investment still decreases.
E) the real interest rate rises, and investment does not change.
C
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As the average annual inflation rate ________, the volatility of inflation tends to ________
A) decreases; increase B) increases; increase C) increases; remain stable D) decreases; remain stable
Suppose that the production function for the economy is Y = AK0.5L0.5. If the capital stock = 40,000, the quantity of labor = 10,000, and the efficiency index = 3, real GDP is
A) $60,000. B) $75,000. C) $150,000. D) $300,000.
The difference between the demand curve and the supply curve is that the demand curve shows ______, whereas the supply curve shows______.
a. the lowest price suppliers are willing to accept for a good or service; the highest price consumers are willing to pay for it b. the highest prices consumers are willing to pay for a good or service; the lowest prices suppliers require to provide it c. how increasing the price of a good increases its luxury status; how long it takes to bring goods to market d. how popular an item is regardless of its price; the available stock on hand at a given point in time
What does the GDP gap measure?
What will be an ideal response?