A decrease in U.S. real interest rates causes the dollar to _________________, which tends to __________________ U.S. Real GDP
A) appreciate; raise
B) appreciate; lower
C) depreciate; raise
D) depreciate; lower
C
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When unions raise wages beyond what productivity increases would permit,
A) more union workers are employed. B) there are higher wages for all union members. C) there is a redistribution of income from low- to high-seniority workers. D) nonunion workers wages in the economy also increase.
If the economy in the graph shown is at point D, and the government wished to bring the economy back to its long-run equilibrium, it might:
A. increase corporate income taxes. B. increase government spending. C. decrease income taxes. D. All of these would bring the economy back to potential GDP.
Table 11-1 Y = C + I + G C = 500 + 0.8(Y?T) I = 300 G = 700 T = 0.25Y Refer to Table 11-1. What is the equilibrium level of income in this model?
A. 5,000 B. 4,500 C. 3,750 D. 3,500 E. 3,250
The Consumer Price Index (CPI):
A. does not suffer from substitution bias because the basket used to measure prices changes every year. B. answers the question, "How much more does it cost today to buy the same basket of goods and services that were purchased at some fixed time in the past?" C. understates the impact of price changes. D. is calculated using a basket of goods and services adjusted annually by government statisticians.