According to Keynesians, an increase in the money supply will have its least impact on GDP when the aggregate demand curve intersects:
A. the horizontal portion of the aggregate supply curve.
B. the vertical portion of the aggregate supply curve.
C. the upward sloping portion of the aggregate supply curve.
D. either the horizontal or upward sloping portion of the aggregate supply curve.
Answer: B
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If prices increase rapidly
A) money's usefulness as a store of value is diminished. B) money increases in value. C) deflation is likely. D) prices will decline to their normal level.
Which of the following would be least likely to cause the production possibilities curve to shift outward?
a. a decreased desire for leisure by workers in the economy. b. an invention that requires fewer resources to produce a good. c. a shift in consumer preferences that causes expansion in the output of one product and a decline in output of other products. d. an expansion in the man-made productive resources available to the economy as the result of a high rate of investment.
Refer to the graphs shown. If quantity supplied is a fixed amount that does not vary with price, then the supply curve looks like:
A. I. B. II. C. III. D. IV.
Positive economics
a. postulates relationships among economic variables that are potentially refutable by real-world events. b. is strictly quantitative and is, therefore, of little value to policy makers. c. will usually indicate which economic policy is best. d. is the same as normative economics.