According to ________, the economy is normally at potential GDP
A) real business cycle models B) the adaptive expectations theory
C) the short-run Phillips curve D) new Keynesian economists
A
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Which of the following is correct? When the expected amount supplied exceeds the expected amount demanded, then:
a. Inventories rise, unemployment tends to rise, and prices tend to fall. b. Inventories rise, unemployment tends to fall, and prices tend to rise. c. Inventories fall, unemployment tends to rise, and prices tend to rise. d. It is impossible for these two to be unequal. e. The nation's economy expands.
The following question relate to a community that is circular in nature with a one mile circumference. There are 81 people evenly distributed around the lake where the town is built. The travel cost is $10 per mile, a restaurant costs $100 to set up, and the cost per meal is $2. Beginning from the initial population of 81, how high would the cost per mile have to go before the optimal number of restaurants would be one more than it was with transportation costs at $10 per mile? Round off small residuals to the nearest whole number.
What will be an ideal response?
In the above figure, if we start at AD1 and SRAS1, and the money supply increases unexpectedly, what causes the economy to get to the long-run equilibrium?
A. People's expectations will revise after a short-run gain in output, wages will rise, and SRAS will shift rightward. B. People's expectations will revise after a short-run loss in output, wages will fall, and SRAS will shift leftward. C. People's expectations will revise after a short-run gain in output, wages will fall, and SRAS will shift leftward. D. People's expectations will revise after a short-run gain in output, wages will rise, and SRAS will shift leftward.
A society can produce two goods: green tea and vitamin water. As this society moves down its production possibility frontier, producing more and more units of vitamin water, the opportunity cost of producing vitamin water increases. The society's production possibilities frontier will be
A. negatively sloped and bowed inward. B. positively sloped and bowed inward. C. positively sloped and bowed outward. D. negatively sloped and bowed outward.