Use the following diagram to answer the next question.
Assume the economy is initially at the full employment level of real GDP. A decrease in net exports will ________.
A. reduce the full employment level of real GDP
B. reduce output in the economy
C. raise the price level
D. reduce the unemployment rate
Answer: B
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During a banking panic, a lender of last resort will
A) purchase banks which are having difficulty but appear sound. B) make loans to solvent but temporality illiquid banks. C) make loans to insolvent but liquid banks. D) make loans to any banks which request them.
If the price of jelly increases 10 percent and the amount of peanut butter purchased decreases 20 percent, then the cross-price elasticity of these goods is:
A. 0.5. B. 2. C. 0.5. D. 2.
For a perfectly competitive firm, profit maximization occurs when
A. marginal revenue equals marginal cost. B. marginal revenue equals average total cost. C. marginal cost is equal to average total cost. D. average total cost is at its minimum.
The functioning of the labor market primarily affects the shape of the
A. aggregate supply curve. B. money demand curve. C. aggregate demand curve. D. planned investment curve.