Given aggregate demand, a decrease in aggregate supply creates:
a. a higher price level and a higher GDP level.
b. a lower price level and a higher GDP level.
c. cost-push inflation.
d. demand-pull inflation.
c
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The above figure shows the U.S. market for flip-flops. With no international trade, the price in the United States for flip-flops is ________. With international trade, the price in the United States for flip-flops is ________
A) $500; $300 B) $14; $12 C) $500; $700 D) $12; $14 E) $700; $300
According to Paul Krugman, during the past decade Japan's macroeconomic policy should have incorporated which of the following?
A) stimulatory monetary policy B) stimulatory fiscal policy C) monetization of the debt by the central bank D) All of the above
During the last two centuries, after adjustment for inflation,
a. corporate bonds have yielded a real return of approximately 7 percent annually, compared to a real return of about 3 percent for corporate stocks. b. corporate stocks have yielded a real return of approximately 7 percent annually, compared to a real return of about 3 percent for bonds. c. both corporate stocks and bonds have yielded a real rate of return of about 3 percent. d. both corporate stocks and bonds have yielded a real rate of return of about 7 percent.
A change in autonomous spending leads to an even greater change in total spending through the multiplier process
Indicate whether the statement is true or false