An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase
B. increase; increase
C. decrease; decrease
D. increase; decrease
Answer: D
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Behavioral economists accept that people ___________ their well-being but sometimes ________________.
A. try to maximize; make mistakes B. try to minimize; maximize it C. try to maximize; maximize their bad choices D. try to maximize; purposefully engage in less than optimal behavior.
A perceived permanent rise in the rate of money growth will cause what long-run effects in the economy?
a. a rise in the nominal rate of interest and a rise in inflation by the same percentage b. a rise in the nominal rate of interest and a rise in real GDP by the same percentage c. a fall in the nominal rate of interest and a rise in inflation by the same percentage d. a fall in the nominal rate of interest and a fall in real GDP by the same percentage
If the first four units of a good consumed have marginal utilities of 8, 4, 2, and 1, respectively, this trend is an indication of the:
A. law of consumer equilibrium. B. law of diminishing marginal utility. C. law of diminishing consumer surplus. D. law of supply.
If the utilization rates of capital (uK) and labor (uN) are procyclical, then the Solow residual, as conventionally measured, is
A. Y / [(uKK)a(uNN)1-a].
B. 1/{Y[(uKK)a(uNN)1-a]}.
C. A
.
D. Y[(uKK)a(uNN)1-a].