Does economic growth result from increases in aggregate demand, short-run aggregate supply, or long-run aggregate supply?
What will be an ideal response?
Economic growth results from increases in long-run aggregate supply. Economic growth occurs because the quantity of labor increases, capital is accumulated and there are technological advances over time. All three of these factors increase potential GDP and shift the LAS curve rightward.
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Given the market demand and cost data in the above figure, the existence of a monopoly firm producing 8 million cubic feet of natural gas makes it possible to produce natural gas at a long-run average cost of
A) 10 cents per cubic foot. B) 20 cents per cubic foot. C) 30 cents per cubic foot. D) 40 cents per cubic foot.
Countries are divided into groups based on income. What income group is most common?
a. middle income ($1,025-$12,475 GDP/capita) b. low income (less than $1,025 GDP/capita). c. high income (greater than $12,475 GDP/capita). d. high and low income groups have the same number.
Which of the following states the relationship between a bond's price and its yield?
a. As the price falls, the yield falls. b. Price and yield are usually independent of each other. c. As the price rises, the yield rises. d. As the price rises, the yield falls. e. As the yield rises, so does the price.
Is the call for protection on the basis of national defense valid?
a. No, because protection has no place in national defense. b. No, protection is always improper. c. Uncertain, economic theory has no answer to this question. d. Yes, although it can be overstated and abused.