There is an increase in incomes due to a tech boom. Which of the following correctly captures the effect of this change on the market for gasoline?
A. Equilibrium quantity will increase, but equilibrium price will decrease.
B. Both equilibrium quantity and price will decrease.
C. Equilibrium quantity will decrease, but equilibrium price will increase.
D. Both equilibrium quantity and price will increase.
Answer: D
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The higher the nominal interest rate, the
A) greater the opportunity cost of holding money. B) lower the quantity of money demanded. C) more the demand for money curve shifts leftward. D) Both answers A and B are correct.
At the potential level of output, there is no seasonal unemployment
a. True b. False Indicate whether the statement is true or false
Foreign aid:
A. provided by developed countries to developing countries represents about 10 percent of the GDP of developed countries. B. is an important source of funding for investment in most developing countries. C. does not contribute much to domestic investment in most developing countries. D. is largely wasted in most developing countries because it comes with no strings attached.
Using Figure 3 above, suppose that the economy was at Y2. This level of GDP would be considered:
A. inflationary. B. a long run level of output. C. recessionary. D. unsustainable over time.