The "rate of return" refers to:
a. the increase in future output made possible by investing one unit of current output in capital accumulation.
b. the dividend payments made on corporate issued stock.
c. the increase in current output made possible by investing in units of future output in capital accumulation.
d. the rate at which capital depreciates.
a
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Suppose the economy is operating below its full employment level. The Fed
A) can move the economy toward the full employment level by expanding the money supply to increase aggregate supply. B) can move the economy toward the full employment level by expanding the money supply to increase aggregate demand through both its direct and its indirect effects. C) can move the economy toward the full employment level by expanding the money supply to increase aggregate demand and to hold prices constant. D) is powerless to affect either aggregate demand or aggregate supply. Fiscal policy is needed.
How will an increase in the world price of crude oil influence the economy of an oil-importing country such as the United States?
a. Aggregate supply will decrease, leading to a decrease in real GDP. b. Aggregate supply will increase, leading to an increase in real GDP. c. Aggregate supply will increase, leading to an increase in prices and smaller GDP. d. A change in the price of an imported good will not affect the domestic economy of an oil-importing country.