Suppose the economy is in long-run equilibrium. If there is a sharp increase in the minimum wage as well as an increase in taxes, then in the short run, real GDP will
a. rise and the price level might rise, fall, or stay the same. In the long run, the price level might rise, fall, or stay the same but real GDP will be unaffected.
b. fall and the price level might rise, fall, or stay the same. In the long run, the price level might rise, fall, or stay the same but real GDP will be unaffected.
c. rise and the price level might rise, fall, or stay the same. In the long run, the price level might rise, fall, or stay the same but real GDP will be lower.
d. fall and the price level might rise, fall, or stay the same. In the long run, the price level might rise, fall, or stay the same but real GDP will be lower.
d
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If the public switches from using cash for most transactions to using checks instead, then all else equal, the money supply will:
A. not change. B. decrease. C. either increase or decrease. D. increase.
Describe the changes in the variables that will cause the demand for a product to increase, shifting the demand curve to the right
What will be an ideal response?
Moving along the short-run Phillips curve, if ________ increases, then ________ decreases
A) unemployment; the price level B) inflation; real GDP C) inflation; unemployment D) unemployment; the expected inflation rate E) inflation; the price level
Expected utility functions have to be concave if they are to represent risk averse tastes.
Answer the following statement true (T) or false (F)