Suppose the economy is on the intermediate range of the aggregate supply curve. Which of the following would reduce both real GDP and the price level?
A. a decrease in aggregate supply
B. an increase in aggregate supply
C. a decrease in aggregate demand
D. an increase in aggregate demand
Answer: C
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The biggest contribution to real U.S. GDP growth in the 1970s was due to growth in
A) total factor productivity. B) the capital stock. C) the labor force. D) both the capital stock and the labor force.
Suppose that a monopolistically competitive firm is in long-run equilibrium. The firm's demand curve is tangent to its average cost curve at Q = 25 . Average cost is minimized at Q = 35, where average cost is $50 . Which of the following is true?
a. This firm charges $50 for the good. b. This firm charges more than $50 for the good. c. This firm charges less than $50 for the good. d. The firm has excess capacity at all output levels greater than 35 units. e. Average cost is $50 at the profit-maximizing output level.
Higher levels of savings will result in all of following except: a. greater economic growth
b. higher capital formation. c. more consumption in the future. d. lower rates of investment.
Consider the competitive market for oil. Which of the following would result from the discovery of new oil fields that can be profitably accessed at the current price?
a. both b and d b. an increase in the demand for oil c. an excess demand for oil as oil companies shift resources to developing the new fields d. an excess supply of oil if the price of oil fails to drop sufficiently e. an increase in the expected future price of oil