Refer to the above figure. Unexpected expansionary monetary policy has caused the aggregate demand curve to shift to AD2. In the short run
A. real GDP will be Y1, and the price level will be above P2.
B. real GDP will be Y2, and the price level will be P2.
C. real GDP will be between Y1 and Y2, and the price level will be between P1 and P2.
D. real GDP will be Y1, and the price level will be P1.
Answer: B
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GDP tends to rise and fall during economic fluctuations but other measures follow the same pattern. One of these measures is
A. the annual precipitation rate. B. the growth of the money supply. C. the inflation rate. D. the unemployment rate.
World agreements to solve global environmental externalities will probably require high income countries to do which of the following?
a. Pay some of the costs but not most of the costs. b. Prevent low income countries from industrializing. c. Share the costs. d. Pay most of the costs.
Which of the following is a positive economic statement?
a. Raising the federal minimum wage to $6.50 per hour will cause the rate of unemployment to increase. b. The United States spends too much on welfare. c. Philosophy is not as interesting as economics. d. Cold weather is much more enjoyable than warm weather.
The law of comparative advantage applies to exchange betwee
What will be an ideal response?