The LM curve
A. is vertical.
B. slopes downward.
C. slopes upward.
D. is horizontal.
Answer: C
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An increase in labor productivity
A) increases the standard of living. B) might be the result of an increase in the quantity of labor. C) generally occurs when physical capital decreases because firms must then hire more workers. D) cannot occur without a corresponding increase in employment. E) decreases the standard of living.
Which of the following will cause a rightward shift of the demand curve?
A) a decrease in the cost of production B) a decrease in the price of the good C) an increase in the expected future price of the good D) all of the above
Transfer payments are payments that are:
A. made to firms in order to transfer goods and services to the government. B. payments made to households that can then be spent by the households. C. made in market transactions in order to get the seller to transfer the goods or services to the buyer. D. made in order to obtain public goods or services.
If the fluctuations in the economy’s real growth rate from year to year are caused primarily by variations in the rate at which aggregate demand increases, then data would show the most rapid inflation occurs when
A. unemployment is the highest, and the lowest inflation occurs when unemployment is the lowest. B. AS grows most rapidly, and the lowest inflation occurs when AS grows most slowly. C. AD rises most slowly, and the lowest inflation occurs when AD rises most rapidly. D. output grows most rapidly and the lowest inflation when output grows most slowly.