Assume equilibrium real GDP per year is equal to full-employment real GDP. If aggregate demand falls, then
A. there will be an expansionary gap.
B. there will be a recessionary gap.
C. long-run aggregate supply will eventually decrease too.
D. the price level will increase in the short run and decrease in the long run.
Answer: B
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Growth in GDP systematically understates the growth in national well-being because
A. ecological costs are netted out of GDP. B. “bads” as well as “goods” get included in GDP. C. investment is not included in GDP. D. as a country gets richer, leisure time increases.
Economic growth can be defined as a percentage increase in
A) per capita real GDP. B) nominal GDP. C) consumption by households. D) real GDP.
The above figure shows the demand and supply curves in the market for milk. Currently the market is in equilibrium. If the government imposes a $2 per gallon tax to be collected from sellers, estimate the change in p, Q, and social welfare
What will be an ideal response?
Which of the following countries has a Lorenz curve that is furthest away from the perfect equality line? a. Brazil
b. The United States. c. Czech Republic d. All have equal income distributions.