If expected inflation increases, which of the following shifts right?
a. both the short-run and the long-run Phillips curves
b. the short-run but not the long-run Phillips curve
c. the long-run but not the short-run Phillips curve
d. neither the long-run nor the short-run Phillips curve
b
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Explain the relationship between real GDP and aggregate planned expenditure, AE. What change to inventories takes place when the two are not equal?
What will be an ideal response?
Suppose the marginal propensity to consume (MPC) equals 0.80, an increase in autonomous investment of $100 will lead to an increase in real Gross Domestic Product (GDP) by
A) $100. B) $400. C) $500. D) $800.
Define remittances
What will be an ideal response?
If you place $100 in a bank account that pays 6% at the end of each year, and you leave your $100 and all your interest in the bank, how much will you have in the bank at the end of seven years with annual compounding?
A) (106)7. B) 7 ? (106). C) 100 ? (1.60)7. D) 100 ? (1.06)7.