Changes in inventories are included in which category under the expenditure approach to GDP accounting?
a. consumption
b. government purchases
c. investment
d. net exports
c
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According to classical economists, when aggregate demand decreases
A) unemployment is reduced, the price level increases, and equilibrium real GDP is reached. B) unemployment is reduced, the price level decreases, and equilibrium real GDP is reached. C) unemployment temporarily increases, the price level increases, and equilibrium real GDP is reached. D) unemployment temporarily increases, the price level decreases, and equilibrium real GDP is reached.
Suppose the rate of inflation over the last 5 years has been around 4-5%. Investors use an inflation expectation of that range when making investment decisions. The decision of the investors is based on the theory of _____
a. absolute advantage b. rational expectations c. adaptive expectations d. sticky wages
The vertical long-run aggregate supply curve reflects the fact that in the long run, an increase in the price level
What will be an ideal response?
If the aggregate demand curve shifts to the right,
A. the economy is in equilibrium. B. people are willing to buy less real output at every price level. C. people are willing to buy more real output at every price level. D. people are willing to buy more real output at a lower price level.