If private investment increased by $50 billion while GDP remained the same, which of the following could have occurred, all else being the same?
a. Consumption spending decreased by $50 billion
b. Exports increased by $50 billion
c. Imports decreased by $50 billion
d. Net exports increased by $50 billion
e. Government spending increased by $50 billion
A
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Suppose the current situation is such that the price level is 120, real GDP is $17 trillion, and GDP along the long-run aggregate supply curve is $16.6 trillion. What will take place to restore the long-run equilibrium?
A) The price level will fall until long-run aggregate supply increases to $17 trillion. B) The price level will fall and money wage rates will rise until real GDP along the long-run aggregate supply curve is $17 trillion. C) Money wage rates will rise until real GDP reaches $16.6 trillion. D) Aggregate demand will increase until both short-run and long-run aggregate supply equal $17 trillion.
Transactions costs refer to
A) the cost of transporting goods from one destination to another. B) the raw material cost of production. C) the costs in time and other resources that parties incur in the process of agreeing to and carrying out an exchange of goods or services. D) the implicit costs of production.
Truck drivers usually earn more than secretaries because
a. drivers require more education and training b. truck drivers have more flexibility in their daily activities c. truckers face greater risks d. secretaries have higher productivity than truckers e. truckers are discriminated against
When economic rent exists
A) the price is equal to the opportunity cost of the resources. B) price is the same as the discount rate. C) resources are allocated inefficiently. D) resources are allocated efficiently.