In the aggregate demand/aggregate supply model, when the output of an economy is less than its long-run potential, the economy will experience
a. declining real wages and interest rates that will stimulate employment and real output.
b. rising interest rates that will stimulate aggregate demand and restore full employment.
c. a budget surplus that will stimulate demand and, thereby, help restore full employment.
d. rising real wages and real interest rates that will restore equilibrium at a higher price level.
A
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Singapore had a GDP per capita of $395 in 1960, and $52,918 in 2013. The U.S had a GDP per capita of $2,881 in 1960 and $52,839 in 2013. Such a growth is referred to as:
A) instant growth. B) disguised growth. C) catch-up growth. D) sustained growth.
Use a graph to show the effects of an expansionary monetary policy moving an economy out of recession and to potential real GDP. Explain what happens to aggregate demand, real GDP, and the price level
What will be an ideal response?
When inflation comes from the supply side, inflation and unemployment are positively correlated. Does this mean that monetary and fiscal policy makers can escape the trade-off between inflation and unemployment?
What two main types of managed-care organizations (or systems) have been used to control health care costs?
What will be an ideal response?