Total income in the economy can sometimes be greater than total spending.
Answer the following statement true (T) or false (F)
False
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If there is excess demand in a market, then this suggests that:
A. the market price is above the equilibrium price. B. there is an opportunity for mutually beneficial trades. C. there is no way to help some people without harming others. D. the market is in equilibrium.
Refer to Figure 11.4. Which diagram illustrates the effect of a decrease in government spending?
A) A B) B C) C D) D
Refer to the above figure. Suppose the economy is at point A. By the proper use of fiscal policy, the government can
A) boost taxes to shift LRAS through point A. B) increase government spending to get the economy to point B. C) raise income tax rates to get the economy to point C. D) reduce government spending to get the economy to point D.
Is it possible for a country's nominal GDP to increase and real GDP to decrease from one year to the next?
A. Yes, it would indicate a larger rise in prices relative to a decrease in output. B. No, since prices are held constant and that would be mathematically impossible. C. Yes, it would indicate a larger rise in output relative to a decrease in prices. D. No, since output is held constant and that would be mathematically impossible.