An increase in aggregate demand is most likely to result in
A. inflation.
B. recession.
C. economic stagnation.
D. a decrease in real GDP.
Answer: A
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The menu cost theory states that
A) wages depend on the productivity of workers. B) economic agents quickly learn the likely responses of the Fed to changes in unemployment. C) the economy is characterized by perfect competition. D) prices are not fully flexible because it is costly for firms to change prices every time there is a demand change.
Studies of the HPAE confirm the importance of savings and investment in increasing economic growth
Indicate whether the statement is true or false
Empirical observations on actual North-South trade patterns tend to
A) support the validity of the Heckscher-Ohlin model. B) support the validity of the Leontief Paradox. C) support the validity of the Rybczynski Theorem. D) support the validity of the wage equalization theorem. E) support the validity of the neo-imperialism exploitation theory.
An increased growth rate in Malaysia has increased the Malaysian demand for U.S.-produced coal. Malaysia increases its imports of U.S.-produced coal by $20 million. U.S. net exports will
A. increase by more than $20 million. B. increase by less than $20 million. C. increase by $20 million or more. D. increase by $20 million.