A recession can be expected to reduce inflation in the economy if the recession is caused by a(n)
a. increase in aggregate demand.
b. increase in aggregate supply.
c. decrease in aggregate demand.
d. decrease in aggregate supply.
c
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Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
Horizontal equity means that equally situated individuals should be taxed equally
a. True b. False Indicate whether the statement is true or false
The annual increase in the dollar value of a financial asset is called the:
A. inflation rate. B. real rate of return. C. real interest rate. D. nominal interest rate.
Which institutions can create money?
A. Mutual funds and retirement funds B. The government and its agencies C. The Fed and the banks D. Households and corporations