If the average price level is rising, then we can guess that
A. any of these answer choices could be true.
B. the unemployment rate must be below the NAIRU.
C. real GDP is above potential GDP.
D. the natural rate of unemployment is below the actual rate of unemployment.
Answer: A
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The IS curve will shift to the right if:
a. the government deficit decreases. b. consumer confidence decreases. c. the MPC decreases. d. taxes decrease. e. the money supply increases.
The price elasticity of new automobile purchases is about 1.2 . This implies that an increase of $1,000 on a $10,000 automobile will
a. reduce the number of autos sold by approximately 1.2 percent. b. increase the consumer expenditures on autos by approximately 1.2 percent. c. reduce the number of autos sold by approximately 12 percent. d. increase consumer expenditures on autos by approximately 12 percent.
Which of the following lists contains, in this order, natural resources, human capital, and physical capital?
a. For a restaurant: the land the restaurant was built on, the money it borrowed to buy supplies, the freezers where the chops and steaks are kept. b. For a furniture company: wood, the skills and knowledge of its workers, saws. c. For a railroad: fuel, railroad engines, railroad tracks. d. None of the above is correct.
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y1. C. P3 and Y1. D. P3 and Y2.