Because of the multiplier, a one-time change in expenditure will...
a) have little secondary effect on real GDP
b) expand real GDP by an infinite amount
c) generate more additional real GDP than the initial change in expenditure
d) decrease saving and investment activity and thereby decrease future real GDP
d) decrease saving and investment activity and thereby decrease future real GDP
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If a country runs a trade deficit to finance increased current consumption, it will have to increase consumption in the future to pay back its borrowings
Indicate whether the statement is true or false
Refer to Table 19-15. Consider the following data on nominal GDP and real GDP (values are in billions of dollars): The GDP deflator for 2015 equals
A) 94.1. B) 105.1. C) 106.2. D) 108.5.
If the exchange rate is defined as the price of the foreign currency in terms of the domestic currency, an increase in the exchange rate:
a. increases domestic demand for foreign goods. b. makes domestic goods cheaper in the foreign markets. c. lowers net exports. d. lowers aggregate expenditure on domestic goods. e. increases the domestic country's external debt burden.
When demand is unit elastic, a 7 percent change in the price of the good
A. will cause a change in quantity demanded greater than 7 percent. B. will not cause any change in quantity demanded. C. will cause a change in quantity demanded equal to 7 percent. D. will cause a change in quantity demanded of less than 7 percent.