What would be the effect of a decrease in the real interest rate and an increase in the expected inflation rate?
a. Both changes would decrease aggregate demand.
b. Both changes would increase aggregate demand.
c. Both changes would increase short-run aggregate supply.
d. Both changes would increase long-run aggregate supply.
B
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One reason China has been able to grow so rapidly even though its financial development is still in its early stages is
A) the high savings rate of around 40%. B) the shift of labor to the agricultural sector. C) the stringent enforcement of financial contracts. D) the ease of obtaining high-quality information about creditors.
According to the above figure for a gasoline market, what happens when the price per gallon of gasoline jumps from $1 to $4?
A) A gasoline surplus is replaced by a gas shortage. B) The market moves from a shortage of 40 million gallons/day to a surplus of 50 million gallons/day. C) The market shortage is replaced by market equilibrium. D) A surplus of 40 million gallons/day results.
Which of the following decrease demand for any good or service?
A. Falling incomes and the product is a normal good. B. A decrease in the price of a substitute good. C. Consumer expectations that either prices or income will rise in the future. D. An increase in the number of buyers. E. An unfavorable change in consumer tastes.
The effects of the national health care program on labor markets will
A) lower the effective wage rate that they must pay for each unit of labor. B) decrease the marginal revenue product of labor. C) increase the marginal revenue product of labor. D) move upward along their downward-sloping marginal-product-of-labor curve.