Which of the following could explain why there is an increase in potential GDP but the equilibrium level of GDP falls?
A) SRAS shifted to the right by more than LRAS.
B) AD shifted to the right by more than SRAS.
C) AD shifted to the right by less than SRAS.
D) AD did not shift and SRAS shifted to the left.
Answer: D
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The Fed's objectives present it with a true dilemma when
a. there are demand shocks caused by shifts in money demand b. there are demand shocks caused by changes in spending c. there are negative supply shocks d. cyclical unemployment exists e. there is member bank opposition
Technological progress leads to which of the following?
(A) An increase in efficiency. (B) Lower savings rates. (C) A decrease in efficiency. (D) A loss of interest in human capital.
Which of the following statements is true? a. Over time, when demand for health care continues to rise relatively more than supply, the cost of health care falls. b. Over time, when demand for health care continues to rise relatively more than supply , the cost of health care continues to rise. c. An increase in the demand for health care is accompanied by an outward shift in the supply curve
d. The price of health care rises either with a fall in demand or an increase in supply. e. The change in the demand for health care with no change in supply causes the price to fall continuously.
If planned investment increases by $30 billion and, as a result, national output increases by $60 billion, the value of the multiplier is
a. 5. b. 4. c. 2. d. 1/2.