04 Jun 1. True False A side benefit of international trade is that it links national interests and increases the opportunity costs of war.
Question
TRUE / FALSE
1. True False A side benefit of international trade is that it links national interests and increases the opportunity costs of war.
2. True False When C + Ig = GDP in a private closed economy, S = Ig and there are no unplanned changes in inventories.
3. True False The risk-free interest rate is the rate on long-term U.S. government bonds.
4. True False Bond prices and interest rates are directly or positively related.
5. True False The public debt is the accumulation of all deficits and surpluses that have occurred through time.
6. True False The M2 money supply may be larger or smaller than the M1 money supply depending on the size of small-denominated time deposit balances and Money Market Mutual Fund balances held by individuals.
7. True False Excess reserves are the amount by which required reserves exceed actual reserves.
8. True False The public debt is held as Treasury bills, Treasury notes, Treasury bonds, and U.S. savings bonds.
9. True False The equilibrium price level and equilibrium level of real GDP occur at the intersection of the aggregate demand curve and the aggregate supply curve.
10. True False Investment is highly stable; it increases over time at a very steady rate.
MULTIPLE CHOICE
11. A recessionary expenditure gap is:
A. the amount by which the full-employment GDP exceeds the level of aggregate expenditures.
B. the amount by which equilibrium GDP falls short of the full-employment GDP.
C. the amount by which investment exceeds saving at the full-employment GDP.
D. the amount by which aggregate expenditures exceed the full-employment level of G
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