Explain the combined effects of these events on U.S. real GDP and the price level, starting from a position of long-run equilibrium
What will be an ideal response?
The combined effect of an expansion in the world economy, the expectation of higher profits in the future, and an increase in government expenditures increase aggregate demand, which increases real GDP and raises the price level.
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The above figure shows a labor market with minimum wage equal to $16. In this figure, what area equals the deadweight loss?
A) area A B) area B C) area C D) area D E) area E
The passage of the ________ in 1930 sparked a trade war that caused net exports to decrease and real GDP to decrease
A) Sherman Antitrust Act B) Clayton Act C) Smoot-Hawley Tariff D) Cellar-Kefauver Act
An increase in the dollar price of the Mexican peso (an appreciation of the peso) would cause
a. Mexico's imports to increase and exports to decline. b. Mexico's exports to increase and imports to decline. c. both Mexico's imports and exports to decline. d. both Mexico's imports and exports to rise.
The fraction of a change in income that is consumed or spent is called
A. the marginal propensity to save. B. average consumption. C. the marginal propensity to consume. D. the marginal propensity of income.