Suppose the Federal Reserve desires to raise the level of planned investment in the economy
It either has to hope that an improvement in business confidence shifts the rate-of-return line to the ________ , or it has to take direct action by ________ the interest rate. A) right, raising
B) right, lowering
C) left, raising
D) left, lowering
B
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Of the three major economic questions, which of the following is the best example of a "What?" question?
A) Should we make faster microprocessors or pest-resistant corn? B) Should higher-income or lower-income people buy SUVs? C) What should doctors be paid? D) Should automobiles be produced using workers or robots? E) Should migrant workers or domestic workers be used to pick grapes?
Potential GDP is the level of output produced when the unemployment rate is
A) equal to the natural unemployment rate. B) greater than the natural unemployment rate. C) less than the natural unemployment rate. D) zero. E) made up of only cyclical unemployment.