Suppose the economy has a recessionary gap. By using an expansionary monetary policy, the Fed can
A) raise real GDP without increasing the price level.
B) raise real GDP and the price level.
C) raise real GDP and decrease the price level.
D) raise the price level alone, but cannot increase real GDP.
B
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Which of the following activities, if any, represents an external benefit? a. The benefit to a consumer from watching a film on DVD
b. The reduction in air quality resulting from industrial development in an urban area. c. The increase in the value of property belonging to your neighbors when you hire a landscaper to beautify your front yard. d. The reduction in property values when a new airport is built in a neighborhood.
Which of the following statements about leading economic indicators is true?
a. They foreshadow turning points in the business cycle. b. Most people refer to them before making any important spending decision. c. They indicate when an economy is in a recession or an expansion.? d. They are the only economic indicators available to economists.? e. They can predict precisely when turning points in an economy will occur.?