What is measured on the horizontal axis on the aggregate demand graph?
A) nominal income B) real GDP per year C) unemployment D) the price level
B
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A minimum wage set above the equilibrium wage will ________ the quantity of labor demanded and ________ the quantity of labor supplied
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease E) not change; not change
The four categories of final users of GDP are:
A. households, firms, governments, and the foreign sector. B. businesses, corporations, firms, and farms. C. businesses, firms, governments, and the foreign sector. D. households, the Federal Reserve, governments, and the foreign sector.
If the price elasticity of demand is 0.6, then a 10 percent increase in the price of the good will lead to a ________ in the quantity demanded.
A. 0.6 percent decrease B. 6 percent decrease C. 6 percent increase D. 0.6 percent increase
How did the collapse of the housing bubble cause a contraction in output?
A. Because banks were unwilling to lend, many businesses were suddenly unable to access credit for their day-to-day needs. B. Because consumers lost confidence in the banking industry, they stopped depositing money, so banks could no longer lend. C. When banks wanted to make loans, but couldn't find any credit-worthy customers to loan to. D. When homeowners lost value in their homes, they stopped saving, which reduced banks' ability to lend.