Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2.
B. P3 and Y1.
C. P2 and Y2.
D. P2 and Y3.
Answer: D
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
For a nonrenewable natural resource, such as oil, the equilibrium price ________ the market fundamentals price
A) is always the same as B) can be greater than but not less than C) can be less than but not greater than D) can be less than, greater than, or equal to
Not having to pay for a good leads to:
A. underconsumption. B. oversupply. C. overconsumption. D. irrational consumption.
________ is defined as the percentage change in real GDP or real GDP per capita between two dates.
A) Growth rate B) Progress index C) Improvement ratio D) Development ratio