The idea behind the Phillips curve is that ________
A) tight labor markets lead to inflationary pressures
B) when the unemployment rate is low, wages will increase
C) when firms raise wages to attract new workers, prices will also increase
D) all of the above
E) none of the above
D
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If your income increases, what is the effect on your budget line?
What will be an ideal response?
The quantity of real GDP demanded increases if _______
A. the buying power of money increases B. the money wage rate rises C. the price level falls D. the nominal interest rate falls
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2. B. P3 and Y1. C. P2 and Y2. D. P2 and Y3.
For the economy to be in equilibrium, government purchases plus ________ must equal saving plus ________.
A. tax revenue; investment B. consumption; investment C. tax revenue; consumption D. investment; tax revenue