Refer to the information provided in Figure 34.3 below to answer the question(s) that follow.
Figure 34.3Refer to Figure 34.3. Which of the following will shift the supply of pounds from S0 to S1?
A. a decrease in the U.S. price level
B. an increase in the British price level
C. an increase in U.S. income
D. a decrease in British income
Answer: D
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
Explain why one can write the demand for money as the price level times a function of the interest rate and real income as follows: = PxL (R, Y)
What will be an ideal response?
In the estimation of demand, the "identification problem" refers to
A) the problem of selecting the proper level of significance. B) the problem of deciding whether to use time series or cross-sectional data. C) the problem of separating out the effects of price on the quantity demanded when supply cannot be held constant. D) the problem of having insufficient variation in prices.
The rapid advance in computer technology is one of the reasons given for the shift of the
a. aggregate demand curve outward. b. aggregate supply curve inward. c. aggregate supply curve outward. d. total expenditures curve upward.