Refer to the above figure. If the aggregate demand curve shifts beyond AD5, which of the following would we NOT expect?
A) strong demand-pull inflation
B) no increase in real Gross Domestic Product (GDP)
C) strong and rapid increases in the price level
D) increases in real net domestic product
D
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The new classical model has as its central idea that
A) workers and firms have rational expectations. B) wage and price stickiness explain fluctuations in real GDP. C) shifts in aggregate demand have no impact on real GDP. D) the Federal Reserve should adopt a monetary growth rule.
A stock's price will fall if there is
A) a decrease in perceived risk. B) an increase in the required rate of return. C) an increase in the future sales price. D) current dividends are high.
The government prefers a market-based approach to reduce firms' emissions of a toxic gas but wants to make certain that no more than 1,000 cubic yards of the gas are ever emitted in a single day. The most efficient policy under these circumstances is likely to be a system of
a. per-unit taxes on emissions of the gas. b. per-unit taxes on the goods produced by firms that emit the gas. c. subsidies to firms that agree not to emit the gas. d. sales of permits to emit specified quantities of the gas on specified days.
The number unemployed divided by the labor force is the
A. per-capita employment rate. B. civilian population. C. discouraged worker total. D. unemployment rate.