Starting from long-run equilibrium, if the public anticipates that policymakers will increase aggregate demand by less than policymakers do increase aggregate demand, and if the short-run aggregate supply curve fully adjusts to the (incorrectly) anticipated increase in aggregate demand, then Real GDP will __________ and the price level will __________
A) rise; rise
B) decline; fall
C) stay constant; rise
D) decline; rise
A
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As a possible approach to eliminating the government budget deficit, increasing taxes for everyone would
A) mean only a small increase in taxes. B) transfer more goods and services to the government sector. C) lead to a large increase in taxes for every worker. D) lead to an inflationary ga
What would be the most likely effect on the price of tickets for the Rose Bowl football game if a wealthy alumnus agreed to pay all the travel and lodging expenses of the visiting players?
A) No effect. B) The price would fall. C) The price would rise. D) We have no basis for predicting because college football is a non-profit enterprise.
Suppose that there are two factors, capital and land, and that the United States is relatively land endowed while the European Union is relatively capital-endowed. According to the Heckscher-Ohlin model
A) European capitalists should support U.S.-European free trade. B) European landowners should support U.S.-European free trade. C) all capitalists in both countries should support free trade. D) all landowners should support free trade. E) the U.S. should compensate European countries once trade commences.
Renee plans to graduate and enter the job market in the spring. Economists are forecasting a recession during the spring. As a result, she
a. is happy because unemployment rates are low during a recession b. is happy because salaries are usually higher during a recession c. does not care because the availability of jobs is not affected by whether there is a recession d. is unhappy because it is generally difficult to find a job during a recession e. favors increasing taxes to help head off the recession