If the economy is in long run equilibrium and then aggregate demand increases, in the long run the increase in aggregate demand means that the
A) price level will be higher but real GDP will be unaffected.
B) real GDP will be larger but the price level will be unaffected.
C) the price level will be higher and real GDP will be larger.
D) neither the price level nor real GDP will be unaffected.
A
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Which of the following does not correctly characterize modern economic growth?
A. It has occurred only in the last 200 or so years. B. It has not affected the average lifespan of human beings. C. It drastically alters the culture and politics of society. D. It spread slowly across the globe, with some societies not having experienced it yet.
The cross-price elasticity of demand for textbooks and copies of old exams is ?3.5. If the price of copies of old exams increases by 10 percent, the quantity demanded of textbooks will:
A. rise by 3.5 percent. B. rise by 35 percent. C. fall by 35 percent. D. fall by 3.5 percent.
If laborers become more efficient over time, and if Company X would want to expand production, it would
A) substitute capital for labor. B) hire more laborers. C) hire fewer laborers. D) produce less product.
Suppose the Okun's law coefficient is 2, the full-employment level of output is $5000 billion, and the natural rate of unemployment is 6%.(a)What is the current level of output if the current unemployment rate is 8%?(b)Suppose the unemployment rate falls to 5%; what is the current level of output?(c)Suppose structural changes in the economy raise the natural rate of unemployment to 7%, and lower the full-employment level of output to $4800 billion. If the current unemployment rate is 8%, what is the current level of output?
What will be an ideal response?