When the price level is below the level at which the aggregate demand curve crosses the long run aggregate supply curve
A. there will be pressures that will lead to a shift of either the aggregate demand or the long run aggregate supply curves.
B. total planned real expenditure will be lower than actual real GDP, and the price level will increase.
C. total planned real expenditures will exceed actual real GDP, and the price level will increase.
D. there will be no price level change.
Answer: C
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Refer to the below graph of the market for low-skilled labor. Sd is the supply of domestic resident workers, and St is the total supply of labor including undocumented workers. Suppose the government cuts off the flow of illegal immigrants to this market. By how much will the employment of legal residents be increased?
A. 15M
B. 120M
C. 135M
D. 22M
Holding other factors constant, a technological improvement that increases the marginal product of capital will:
A. decrease national saving. B. decrease investment. C. increase investment. D. increase national saving.
Since the 1930s, overall tariff rates in the United States have
A) increased. B) decreased. C) remained unchanged. D) become very unstable, changing week to week.
Asymmetric shocks pose a problem for nations linked by fixed exchange rates to a base currency. In general:
A) the home nation always has a better outcome than its foreign trading partner. B) both nations share a common currency and so will experience equal results. C) when the base currency nation takes any action to counteract the shock, it forces its exchange rate partner to do the same to maintain its peg. D) both nations only get half the benefit of any economic policy.