The table above gives the aggregate demand and aggregate supply schedules in Lotus Land. Lotus Land is in short-run macroeconomic equilibrium
In the long run, if aggregate demand does not change, then Lotus Land will return to full employment as ________. A) the money wage rate rises
B) the money wage rate falls
C) businesses cut their imports
D) the government cuts taxes
B
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Suppose that private saving is $1590 billion, investment is $1945 billion, and the current account balance is -$489 billion. From the uses-of-saving identity, how much is government saving?
A) -$134 billion B) -$844 billion C) $844 billion D) $134 billion
The aggregate supply curve shows how much the nation's businesses are willing and able to produce at each price level
a. True b. False Indicate whether the statement is true or false
The multiplier principle indicates that if business decision makers become more optimistic about the future and, as a result, increase their investment expenditures by $82 billion, real GDP
a. will increase by less than $82 billion if the economy was initially operating well below capacity. b. will increase by more than $82 billion if the economy was initially operating well below capacity. c. will increase by more than $82 billion if the economy was initially operating at full-employment capacity. d. will decline if the marginal propensity to consume is less than 1.
An economy's production function has the constant-returns-to-scale property. If the economy's labor force doubled and all other inputs stayed the same, then real GDP would
a. stay the same. b. increase by exactly 50 percent. c. increase by exactly 100 percent. d. increase, but not necessarily by either 50 percent or 100 percent.