Toyota (a Japanese-based company) produces Tundras in the state of Texas. In which country’s GDP is it included?
A. Japan and the United States
B. Japan because Toyota is a Japanese company
C. The United States because that is where it was produced
D. Neither country because it is sold internationally
Answer: C
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Refer to Figure 17-1. Suppose that the economy is currently at point A. If the Federal Reserve engaged in expansionary monetary policy, where would the economy end up in the short run?
A) It would remain at point A. B) point B C) point C D) point D E) point E
Refer to Figure 14.3. Suppose the economy is initially at long-run equilibrium and the Fed increases the target inflation rate, and to hit this rate, it must reduce the real interest rate. The economy then reaches a new, short-run equilibrium point
Assuming expectations are adaptive, the next movement is best represented as a movement from A) point C to point B. B) point C to point A. C) point D to point C. D) point B to point C.