If the price level rises, the effect on the expenditure schedule and equilibrium real GDP is to
a. increase both.
b. decrease both.
c. shift the expenditure schedule upward and decrease equilibrium real GDP.
d. shift the expenditure schedule downward and increase equilibrium real GDP.
b
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The following graph is the production possibilities frontier of a nation:
Refer to the graph. The combination "5 drill presses and 2 units of bread" indicates an
A. inefficient combination for the nation. B. ideal combination for the nation. C. efficient combination for the nation. D. unattainable combination for the nation.
Countries that export a diversified selection of export products do not seem to be at much risk of experiencing immiserizing growth.
Answer the following statement true (T) or false (F)
Unemployment statistics are often criticized for
A. overstating the number of people out of work, because retirees are included in the statistics. B. understating the number people out of work, because full-time college students are excluded. C. understating the number of people out of work, because discouraged workers are excluded in the statistics. D. overstating the number of people out of work, because the unemployment statistics include all low-income workers.
Those who favor passive policymaking argue that all of the following exist EXCEPT
A. pure competition is typical. B. the trade off between inflation and unemployment is not stable in the short run and is non-existent in the long run. C. aggregate demand shocks can influence real Gross Domestic Product (GDP) and unemployment. D. perfectly flexible wages and prices.