A decrease in aggregate demand causes a decrease in ________ only in the short run, but causes a decrease in ________ in both the short run and the long run
A) the price level; real GDP B) the price level; the price level
C) real GDP; real GDP D) real GDP; the price level
D
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Gross domestic product (GDP) is not a perfect measure of welfare because it: a. treats a dollar spent on guns the same as a dollar spent on education. b. treats a dollar spent on exports the same as a dollar spent on imports. c. double counts the value of leisure time
d. double counts depreciation. e. counts illegal activities in the underground economy.
Suppose that the U.S. government budget deficit decreases. What curves in the open-economy macroeconomic model shift? Explain why each curve shifts the direction it does
When graphing the demand curve:
A. both quantity and price go on the horizontal axis. B. quantity goes on the vertical axis and price goes on the horizontal axis. C. it doesn't matter which axis price and quantity are placed on. D. quantity goes on the horizontal axis and price goes on the vertical axis.
According to the real business cycle model
A) increases in aggregate demand raise GDP. B) increases in aggregate demand lower GDP. C) increases in aggregate demand do not affect GDP. D) increases in aggregate demand lower the price level.