Use the following diagram to answer the next question.
If CD is the economy's current production possibilities frontier, what is the most likely reason for operating at point X?
A. increases in the quantity and the quality of resources
B. improvement in labor productivity and the number of work-hours
C. technological progress and industrial change
D. unemployment and inefficient allocation of resources
Answer: D
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Shocks to the macroeconomy will cause a change in the equilibrium real interest rate, except ________
A) permanent supply shocks B) aggregate demand shocks C) temporary supply shocks D) all of the above E) none of the above
Stricter environmental regulations and increased demand for energy have caused an increase in the demand for relatively clean natural gas. In the last several years, improved extraction technologies and new discoveries have increased the availability of natural gas. What has been the net effect on price and quantity for natural gas?
A. Quantity sold rose while the effect on price is ambiguous. B. Quantity sold fell and the effect on price is ambiguous. C. Quantity sold and price both rose with certainty. D. Quantity sold and price both fell with certainty.
GDP per capita means GDP:
A. in real terms. B. adjusted for inflation. C. per person. D. divided by the capital stock.
If the price level increases in the United States relative to foreign countries, then American consumers will purchase more foreign goods and fewer U.S. goods. This statement describes:
A. the output effect. B. the foreign purchases effect. C. the real-balances effect. D. the shift-of-spending effect.