Suppose that aggregate demand increases along the upward sloping portion of the aggregate supply curve. What is the result?
A. Nominal GDP and real GDP decrease by the same amount.
B. Nominal GDP increases more than real GDP increases.
C. Real GDP increases more than nominal GDP increases.
D. Nominal GDP and real GDP increase by the same amount.
Answer: B
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"Sharp contractions in a country's output and employment invariably result from a crisis in which the country suddenly loses access to all foreign sources of funds." Explain how the current account identity necessitates these contractions
What will be an ideal response?
The money supply will decrease if
A) either the monetary base or the money multiplier increases in value. B) either the monetary base or the money multiplier decreases in value. C) either the monetary base increases in value or the money multiplier decreases in value. D) either the monetary base decreases in value or the money multiplier increases in value.
A concern about crowding out caused by increased government borrowing is that:
a. interest rates on private borrowing fall. b. lower rates of economic growth can result from a decline in business investment spending. c. the federal government may default on its loans. d. foreign lenders find it less attractive to help finance federal deficits.
If a monopolist's marginal revenue exceeds its marginal cost at its current level of output, then to maximize its profit the monopolist should:
A. do nothing. B. increase output until price equals marginal cost. C. decrease output in order to increase the gap between marginal revenue and marginal cost. D. increase output until marginal revenue equals marginal cost.