Suppose we observe the price level increasing and real GDP decreasing. An explanation for this is that
A) the dollar weakened and the effect on aggregate supply was less than the effect on aggregate demand.
B) the dollar weakened and the effect on aggregate supply was greater than the effect on aggregate demand.
C) the dollar strengthened and the effect on aggregate supply was less than the effect on aggregate demand.
D) the dollar strengthened and the effect on aggregate supply was greater than the effect on aggregate demand.
B
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The natural rate hypothesis asserts that
A) changes in the unemployment rate from changes in the inflation rate are temporary. B) changes in the unemployment rate are natural and long-lasting. C) when prices change, the inflation rate changes temporarily and then returns to its natural rate. D) changes in the natural unemployment rate are only temporary. E) price changes occur at a natural rate, near a 6 percent average inflation rate.
Saving is a leakage from the circular flow. Why didn't the classical economists think saving might cause consumption expenditures to fall short of total output?
What will be an ideal response?
The firm's expansion path records
a. profit-maximizing output choices for every possible price. b. cost-minimizing input choices for all possible output levels for when input prices expand along with production. c. cost-minimizing input choices for all possible output levels for a fixed set of input prices. d. cost-minimizing input choices for profit-maximizing output levels.
When a country allows trade and becomes an exporter of a good,
a. consumer surplus and producer surplus both increase. b. consumer surplus and producer surplus both decrease. c. consumer surplus increases and producer surplus decreases. d. consumer surplus decreases and producer surplus increases.