Per capita GDP will definitely increase if
A. Population increases more rapidly than GDP.
B. GDP and population increase at the same rate.
C. Population and GDP decrease at the same rate.
D. GDP increases more rapidly than population.
Answer: D
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
Intermediaries, known as middlemen, specialize in
A) reducing transaction costs. B) negotiating high prices for sellers. C) negotiating low prices for buyers. D) encouraging consumers to buy goods on credit, rather than with cash.
Which of the following is likeliest to have increased between points A and D?
a. price indices
b. interest rates
c. government spending
d. net imports
Suppose that a new advertising campaign extolling the virtues of apple juice is successful, and a major freeze destroys half of the country's apple crop. What happens to the price and quantity of apple juice?
A. The equilibrium price of apple juice might rise or fall and the equilibrium quantity of apple juice falls. B. The equilibrium price of apple juice might rise or fall and the equilibrium quantity of apple juice rises. C. The equilibrium price of apple juice rises and the equilibrium quantity of apple juice might rise or fall. D. The equilibrium price of apple juice falls and the equilibrium quantity of apple juice might rise or fall.