An increase in the price level in an economy will _____
a. shift the aggregate expenditure line upward
b. shift the aggregate expenditure line downward
c. cause an upward movement along the aggregate expenditure line
d. cause a downward movement along the aggregate expenditure line
e. shift the aggregate demand curve downward
b
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If the MPC in an economy is 0.75 and aggregate expenditures increase by $5 billion, then equilibrium real GDP will increase by
A. $8.75 billion. B. $3.75 billion. C. $6.7 billion. D. $20 billion.
As GDP decreases during recessions, unemployment generally increases. Unemployment is therefore said to be procyclical
Indicate whether the statement is true or false
The current demand for a good would decrease if
a. the price of a complementary good rose. b. the price of a substitute good rose. c. consumers suddenly believed the price of the good would be sharply higher in the future. d. consumer income increased.
Which of the following items would be in GDP?
A. the value of pollution emitted from a factory B. the building that a company has used for its headquarters for a decade C. household purchasing tax advice from an accountant D. a single person cleaning their own clothes