The components of consumption expenditure, investment expenditure, government spending, and spending on net exports (exports minus imports) make up _____________________.
a. aggregate demand
b. aggregate supply
c. economic demand
d. economic supply
a. aggregate demand
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In the above figure, if D2 is the demand curve, then a price of P3 would result in
A) a shortage of Q3 - Q1. B) a shortage of Q4 - Q3. C) a surplus of Q3 - Q1. D) a surplus of Q4 - Q0.
Assume that the central bank increases the reserve requirement. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and current international transactions in the context of the Three-Sector-Model?
a. The GDP Price Index and current international transactions remain the same. b. The GDP Price Index falls, and current international transactions become more negative (or less positive). c. The GDP Price Index rises, and current international transactions becomes more negative (or less positive). d. The GDP Price Index rises, and current international transactions remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Suppose the marginal product of labor in the economy is given by MPN = 200 - 0.5 N, while the supply of labor is 100 + 4w.(a)Find the market-clearing real wage rate.(b)What happens if the government imposes a minimum wage of 40? Is there involuntary unemployment?(c)What happens if the government imposes a minimum wage of 60? Is there involuntary unemployment?
What will be an ideal response?
Based on the theory of the expectations-augmented Phillips curve, if the expected inflation rate is 2%, the short-run Phillips curve will
A. be horizontal at an expected inflation rate of 2%. B. have a kink at an inflation rate of 2%. C. be the same as the long-run Phillips curve. D. intersect the long-run Phillips curve at the natural unemployment rate, when the inflation rate is 2%.