Other things being equal, the economy's aggregate demand curve shows that
A. a change in the general price level causes the curve to shift.
B. real Gross Domestic Product (GDP) and the price level are not related.
C. a change in the general price level causes a change in the quantity of final goods and services purchased.
D. as the price level falls, total planned expenditures fall as well.
Answer: C
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The short-run effect of a negative supply shock is
A) lower inflation and a declining output gap. B) lower inflation and an increasing output gap. C) higher inflation and a declining output gap. D) higher inflation and an increasing output gap.
Middlemen, such as grocers, stockbrokers, and realtors
a. specialize in reducing transactions costs. b. provide nothing of value to either the buyer or the seller. c. have no effect on economic output in society. d. do not exist in capitalist economies.
The GDP is the value of all final goods and services produced
A. by domestically controlled companies.
B. by domestically owned companies.
C. by citizens of the country.
D. within a nation's boundaries.
If the consumer price index (CPI) in Year 1 was 200 and the CPI in Year 2 was 215, the rate of inflation was:
a. 15 percent. b. 7.5 percent. c. 5 percent. d. 215 percent.