Assuming that inflation has occurred over time, what is the relationship between nominal GDP and real GDP in each of the following situations In years prior to the base year, nominal GDP _____ real GDP
Fill in the blank(s) with the appropriate word(s).
Answer: is less than
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Buying insurance is similar to
A) selling risk. B) irrationally avoiding life's risks. C) being a free rider. D) buying risk.
The classical theory of aggregate supply where markets are perfectly flexible
a. may or may not be compatible with the Keynesian system. b. is easily added the IS-LM framework of aggregate demand. c. is fundamentally incompatible with the Keynesian system. d. is consistent with the IS-LM framework if all shocks are to the IS curve. e. none of the above.
What happens when a command-and-control regulation has been satisfied?
a. Polluters get a pollution charge tax break. b. Polluters have access to new marketable permits. c. Polluters have no incentive to do better. d. Polluters have many incentives to do better.
Long-term economic ___________ is illustrated in the AD/AS framework by a gradual shift of the aggregate supply curve to the right.
a. growth b. decline c. stagnation d. stagflation