An economy in which output has decreased and prices have decreased would suggest a:
A. decrease in short-run aggregate supply.
B. increase in aggregate demand.
C. increase in short-run aggregate supply.
D. decrease in aggregate demand.
Answer: D
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The values of real GDP and real GNP are almost the same for the United States
Indicate whether the statement is true or false
Economists believe that externalities can be cured by market methods
a. True b. False Indicate whether the statement is true or false
If the U.S. economy grew rapidly in the future, would this eliminate the long run deficit of Social Security?
a. No; future Social Security benefits are tied to nominal wages and therefore increases in real incomes will also increase the future retirement benefits. b. Yes; a rapid real growth rate would increase tax revenues without increasing the real benefit levels of future recipients. c. Yes, more rapid growth would lead to inflation and this would help eliminate the system's long run deficit. d. Yes, but only if the rapid growth led to a substantial increase in net exports.
Exhibit 15-8 Aggregate demand and supply curves
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In Exhibit 15-8, supply-siders claimed that the shift from AS1 to AS2 would occur if the government:
A. increased tax rates and increased the amount of government regulation. B. increased tax rates and decreased the amount of government regulation. C. decreased tax rates and increased the amount of government regulation. D. decreased tax rates and decreased the amount of government regulation.