Which set of changes is definitely predicted to raise Real GDP in the short run?
A) Wealth increases and there is an adverse supply shock.
B) Individuals expect higher (future) incomes and wage rates fall.
C) Business taxes rise and wage rates fall.
D) The U.S. dollar appreciates and there is a beneficial supply shock.
E) none of the above
B
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How is the effect of expansionary monetary policy depicted in an aggregate supply-aggregate demand graph?
A) The aggregate demand curve shifts rightward. B) The aggregate supply curve shifts leftward. C) The equilibrium level of income increases, but neither curve shifts. D) The aggregate supply curve shifts rightward.
Most theories of comparative advantage explain trade patterns due to international differences in
A) demand conditions. B) supply conditions. C) demand and supply conditions. D) tariffs.
A decrease in taxes
a. increases GDP as much as a decrease in government purchases b. increases GDP less than an equal increase in government purchases c. decreases GDP more than an equal decrease in government purchases d. changes GDP but in an unpredictable way because some people consume more than others and others save more than some e. increases consumption but has no effect on GDP
Externalities exist when the actions of one agent
A. benefit the agent committing the action. B. hurt the agent committing the action. C. benefit or hurt another agent who is a part of the exchange relationship. D. benefit or hurt another agent who is not part of the exchange relationship.