Economic expansions might lead to inflation because an expansion leads to:
A. a decrease in the unemployment rate, which increases wages.
B. an increase in the unemployment rate, which increases wages.
C. a decrease in the unemployment rate, which decreases wages.
D. an increase in the unemployment rate, which decreases wages.
Answer: A
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If real output and velocity are stable and predictable, then the equation of exchange can be used to derive a simple relationship between: a. the money supply and the price level
b. the money supply and the interest rate. c. the money supply and the foreign exchange rate. d. unemployment and aggregate demand. e. unemployment and nominal GDP.
Resource X is necessary to the production of good Y. If the price of resource X rises, the _____________ curve for good Y will shift ____________ resulting in a(n) _____________ in the equilibrium price of Y and a(n) ____________ in the equilibrium quantity of Y
A) supply; rightward; decrease; increase. B) demand; leftward; decrease; decrease C) demand; rightward; increase; increase D) supply; leftward; increase; decrease E) supply; leftward; increase; increase
Marginal product refers to ______, and marginal revenue product refers to______.
a. labor; the value of economic and accounting profits b. a change in output; revenue gained from that change c. capital; income gained through investments in capital d. derived demand for labor; an increase in profitability
Expansionary fiscal and monetary policies are meant to engineer:
i. An inward shift in the vertical long run aggregrate supply function (LRAS). ii. An inward shift in the upward sloping short run aggregate supply function (SRAS). ii. An inward shift in the downward sloping aggregate demand function (AD). iv. An outward shift in the downward sloping aggregate demand function (AD). A) i and ii B) iv only C) ii only D) i only