Which of the following is not consistent with a self-correcting economy?
a. Falling wages that correct a recessionary gap
b. Falling prices that correct a recessionary gap
c. Rising prices that correct an expansionary gap
d. Tendency of the short-run aggregate supply to shift until it intersects aggregate demand at potential GDP
e. An active approach to a recession or depression
e
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When a commercial bank borrows from the Federal Reserve,
A) Treasury liabilities rise. B) Treasury assets rise. C) Federal Reserve assets rise. D) bank reserves fall.
The IS model implies that a dollar of government spending has a larger impact on equilibrium output than does a dollar of taxes. Explain
What will be an ideal response?
A merger between firms in which one firm purchases an input from the other is called a
A) conglomerate merger. B) horizontal merger. C) vertical merger. D) none of the above.
The rate of interest is determined by the
a. quantity of money available on the market b. supply and demand for loanable funds c. marginal factor cost of capital d. firm's MRP and the price of the good e. firm's MPP and the price of the good