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The central bank can influence the economy only in the short run
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- in 2010, Maxine's nominal income increased by 3% while the price level rose by 1%. Consequently, Maxine's real income:
- In the short run, increased government budget deficitsA.can influence real GDP, the price level, and employment.B.increase taxes.C.have no effect on equilibrium real GDP.D.
- Refer to the table: What is consumption?Total income$5731Household purchases of durable goods$1108Household purchases of nondurable goods$702Household purchases of non-education services$203Household purchases of education services$302Household purchases of new housing$816Purchases of capital equipment$333Inventory changes$75Purchases of new structures$267Depreciation$401Local government spending on goods and services$236State government spending on goods and services$419Federal government spending on goods and services$1182Transfer payments$707Foreign purchases of domestically produced goods$217Domestic purchases of foreign goods$129a. $4,550b. $2,315c. $3,270d. $2,477