Long-term growth in production can be explained by:
a. an improvement in the quality of resources available.
b. a gradual but consistent rise in the price level
c. a rapid and accelerating increase in the price level.
d. a trade surplus that leads to the accumulation of gold.
e. the peaks and troughs of economic fluctuations.
a
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Over the last twenty years, real GDP in the U.S. economy has increased and there has been inflation. This indicates that
A) aggregate demand has been constant while aggregate supply has increased. B) aggregate demand has increased more than aggregate supply. C) aggregate demand has increased while aggregate supply has been constant. D) aggregate demand has increased less than aggregate supply.
If the interest rate is 20 percent, $100 to be received four years from today has a present value of approximately
A) $48. B) $69. C) $80. D) $100.
Monetarists tend to think that the aggregate demand curve is
A) stable. B) vertical. C) horizontal. D) sensitive to changes in investment spending.
Is it possible to express an economic model in words without diagrams?
a. No, models can only be stated in diagrams. b. No, the very definition of model requires mathematical form. c. Yes, some of the simplest models are verbal statements. d. Yes, although the best models always use diagrams. e. Uncertain, economic theory has not answered this question yet.