If the federal government runs a budget deficit, but the budget deficit as a percent of GDP is less than the growth rate of real output, the
a. national debt will decrease as a share of GDP.
b. national debt will remain a constant share of GDP.
c. national debt will increase as a share of GDP.
d. size of the national debt (in dollar value) will decline.
A
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Which of the following explains why the Fed is able to have a dramatic effect on aggregate demand and real output in the short run?
A. price confusion that speeds up the adjustment of real GDP B. money illusion that speeds up the adjustment of the price level C. sticky prices that slow the adjustment of the price level D. sticky wages that slow the adjustment of real GDP
The consumer price index (CPI):
A. measures the price of a fixed basket of goods and services relative to the price of that same basket in some base year. B. measures the price of a basket of goods and services that constantly changes as the composition of consumer spending changes. C. measures the amount of money that it takes to produce a fixed level of utility. D. is one of the many statistics in the National Income Accounts.