When prices rise, which of the following happens to income?
a) It goes down
b) It buys less
c) It rises to meet prices
d) It is used to buy different things
Ans: b) It buys less
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A numerical limit imposed by a government on the quantity of a good that can be imported into the country is called a
A) barricade. B) quota. C) tariff. D) quantity floor.
If initially the money supply is $1 trillion, velocity is 5, the price level is 1, and real GDP is $5 trillion, an increase in the money supply to $2 trillion
A) increases real GDP to $10 trillion. B) causes velocity to fall to 2.5. C) increases the price level to 2. D) increases the price level to 2 and velocity to 10.
According to Keynesians, an increase in the money supply will have its greatest impact on GDP when the aggregate demand curve intersects:
a. the vertical portion of the aggregate supply curve. b. the upward sloping portion of the aggregate supply curve. c. the horizontal portion of the aggregate supply curve. d. either the upward sloping or the vertical portions of the aggregate supply curve. e. either the horizontal or vertical portions of the aggregate supply curve.
If nations begin to specialize in production for the purpose of trade,
a. the utility from consumption will increase, but not the total output. b. total world output will increase, as well as well being from consumption. c. total world output will increase, but well being from consumption will not. d. neither total output nor well being from consumption will change. e. the impact on total output and well being cannot be predicted.