The aggregate expenditure model focuses on the ________ relationship between real spending and ________.
a. short-run; real GDP
b. short-run; inflation
c. long-run; real GDP
d. long-run; inflation
a. short-run; real GDP
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If government sets price supports on agricultural goods that are above equilibrium prices, what must the government do to maintain those prices?
The opportunity cost of an activity includes the value of:
A. the chosen activity minus the value of the next-best alternative. B. all of the alternatives that must be forgone. C. the least-best alternative that must be foregone. D. the next-best alternative that must be foregone.
The rule suggested by the monetarists is that the money supply increases at the same rate as
A. the price level. B. the interest rate. C. the velocity of money. D. the potential growth in real GDP.
Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher