Refer to the graph shown. In the graph, if the price level is P1 and the aggregate demand curve is AD0 then the economy is:
A. in an inflationary gap.
B. in a recessionary gap.
C. fully employed.
D. in a long-run equilibrium.
Answer: B
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A firm can sell as many units of its output as it wants for $10 a piece. The current market wage rate for its workers is $20 per hour. It follows that the firm will hire workers up to the point where the last worker hired produces how much per hour?
a. one unit. b. two units. c. one-half a unit. d. 200 units.
Refer to Table 11.1. What is the value of the marginal propensity to import?
A) 0.15 B) 0.25 C) 0.6 D) 0.9
The table above gives data for the nation of Pearl, a small island in the South Pacific. The economy is at full employment when real GDP is
A) $31 billion. B) $34 billion. C) $28 billion. D) $22 billion. E) $25 billion.
If money is superneutral,
A) a one-time change in the money supply has no real impact. B) a one-time change in the money supply has a real impact. C) a change in the money growth rate has no real impact. D) a change in the money growth rate has a real impact.