Use the following graph to answer the next question.
Assume the economy is initially located on AD0 and AS0. An increase in personal income taxes would result in price ________ and real domestic output ________.
A. E; B
B. F; C
C. F; A
D. G; B
Answer: A
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Use the following table to answer the next question.All figures in the table below are in billions of dollars.RGDPAggregate Expenditures (Closed Economy)ExportsImports$400$440$50$60450480506050052050605505605060600600506065064050607006805060If this economy were an open economy, the equilibrium real GDP will be
A. $550 billion. B. $650 billion. C. $600 billion. D. $500 billion.
Suppose there are two countries, X and Y. If the exchange rate, as measured in X's currency, is currently 9, what do citizens of the nation of Y see when they read their newspapers?
a. The exchange rate for X's currency is 9. b. The exchange rate for X's currency is more than 9. c. The exchange rate for X's currency is 3. d. The exchange rate for X's currency is 0.11. e. Knowing one exchange rate does not mean we can tell the other exchange rate.
A profit-maximizing, competitive firm will always hire an additional worker when the additional worker makes a positive contribution to
a. total revenue. b. total profit. c. the value of the marginal product of labor. d. marginal revenue.
Consider an economy with flexible exchange rates. If there are high levels of inflation in the economy, then the appropriate monetary policy would be to ________ the money supply, which will cause the ______ curve to shift ________.
A) increase; the LM; left B) decrease; the LM; right C) decrease; the LM; left D) increase; the IS; left