Suppose a family's income increases by 5% at the same time that inflation is 6%. Then the family's living standard:
A.
Will increase by 5%
B.
Will not change
C.
Will increase by 1%
D.
Will decrease
D.
Will decrease
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If an increase in autonomous consumption spending of $10 million results in a $50 million increase in equilibrium real GDP, then
A) the MPC is 0.5. B) the MPC is 0.75. C) the MPC is 0.8. D) the MPC is 0.9.
The price elasticity of demand is defined as
a. the absolute change in price divided by the absolute change in quantity demanded. b. the absolute change in quantity demanded divided by the absolute change in price. c. the percentage change in quantity demanded divided by the percentage change in price. d. the percentage change in price divided by the percentage change in quantity demanded.
One source of the supply of dollars in the world is
A) the purchase of U.S. exports by foreign residents. B) the sale of U.S. domestic assets to foreigner residents. C) U.S. imports of foreign merchandise. D) U.S. sales of gold to foreigner residents.
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y1. C. P3 and Y1. D. P3 and Y2.