Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; potential
C. higher; higher
D. lower; higher
Answer: B
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In a certain economy, the components of aggregate spending are given by:C = 500 + 0.8(Y - T) - 300rI = 200 - 400rG = 200NX = 10T = 150Given the information about the economy above, what would be the impact on short-run equilibrium output of a one-percentage-point increase in the real interest rate from 4 percent to 5 percent?
A. Short-run equilibrium output would decrease by 7 units. B. Short-run equilibrium output would increase by 35 units. C. Short-run equilibrium output would decrease by 700 units. D. Short-run equilibrium output would decrease by 35 units.
If a city has 3293 unemployed people and 69,884 employed people, then the city's unemployment rate equals
A) 45.0%. B) 4.5%. C) 4.3%. D) 0.45%.
Shocks to long-run aggregate supply can be a source of business fluctuations ________
A) only in real business cycle models B) only in new Keynesian models C) in both real business cycle and new Keynesian models D) only if the money supply rises
The above table shows the daily production possibilities for a bakery. Currently the bakery bakes 60 pizzas and 180 loaves of bread, that is at alternative C. Using the above table, what is the opportunity cost of moving from alternative C to alternative D?
a. 1/2 loaf of bread b. 60 loaves of bread c. 2 loaves of bread d. 30 loaves of bread