Suppose workers become pessimistic about their future employment, which causes them to save more and spend less. If the economy is on the intermediate range of the aggregate supply curve, then:
A. both real GDP and the price level will fall.
B. real GDP will fall and the price level will rise.
C. real GDP will rise and the price level will fall.
D. both real GDP and the price level will rise.
Answer: A
You might also like to view...
In which of these markets would the firms be facing the least elastic demand curve?
A) perfect competition B) pure monopoly C) monopolistic competition D) oligopoly
Moral hazard would lead to
a. Only risky drivers buying insurance b. More risky drivers buying more insurance c. Drivers taking on a lot more risk after buying insurance d. Drivers becoming a lot more careful after buying insurance
Based on the rising housing prices of 2000-2005, many buyers opted for interest-only loans and variable rate mortgages with little or no down payment because
a. they expected short-term interest rates to fall substantially in the future and this would reduce their monthly mortgage payment in the years ahead. b. variable rate mortgages are a good way to reduce the risk accompanying your investment when you plan to stay in the house for a long time. c. they thought housing prices would continue to rise and therefore they would be able to sell the house for a profit within a couple of years. d. they could easily recoup their investment, even if there was a downturn in housing prices in the future.
If a saver has a positive rate of time preference then the present value of $100 to be received 1 year from today is:
A. not calculable. B. unknown to the saver. C. less than 100. D. more than $100.