Ch 26: The Long Run Economic Growth
Two equations: Y0(1+g)N (Y is initial value of GDP, g is constant rate of growth, N is
number of years), rule of 72: 72/(growth rate)=doubling time
1. C 2. D 3. E 4. C 5. B 6. B 7. B 8. C 9. C 10. B 11. B 12. E 13.
Relationship between output gaps and adjustment of factor prices?
When there is a recessionary gap, this means AD and AS are intersecting at a Y
below Y*. Unemployment is high and if wages are not sticky, then factor prices
(wages) will decrease and AS wi
Ch 27: Money and Banking
A reduction in domestic bank reserves because of payments to foreign banks causes
a multiple contraction in deposits only if banks maintain the saem target reserve
ratio at all times.
1. Commercial bank reserves are
Ch25: The Difference between Short Run and Long Run Economic Growth
3. Material standard of living is measured by an increase in productivity (GDP/Fe). If
in the future, people are more educated and higher quality workers, they can
Charter of Rights and Free
Section 1: The terms in the charter are not absolute and can be subject to examination. These laws
must be demonstrably justified in a free and democratic society
Section 15: Every person is subject to the same benefits and pr