Imagine the U.S. economy is in long-run equilibrium. Then suppose the aggregate demand increases. We would expect that in the long-run the price level would
a. increase
b. decrease.
c. stay the same.
d. decrease by the same amount as the increase in aggregate demand.
a
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Suppose that firms find that their inventories are less than planned. In this case, what is the initial relationship between aggregate planned expenditure and real GDP? Using the aggregate expenditure model, what adjustments, if any, take place?
What will be an ideal response?
Suppose that you and two friends have an opportunity to purchase a pizza restaurant. Each of you would put up $75,000 . The revenue from the restaurant is expected to remain $200,000 per year for the next several years
The costs (not including the opportunity costs of your investment) of operating the restaurant are expected to remain steady at $185,000 for the next several years. The current market rate of interest is 7 percent per year. Should you go in on this deal? Explain.
Of the three primary tax sources of revenue for the U.S. federal government, which of the following has decreased the most as a percentage of GDP since 1962?
A) corporate income taxes B) social insurance taxes C) sales and excise taxes D) individual income taxes
If Target were to merge with Wal-Mart, this would be referred to as a(n)
A) horizontal merger. B) vertical merger. C) conglomerate merger. D) anti-competitive merger.