Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential
B. recessionary; higher; potential
C. recessionary; lower; lower
D. expansionary; higher; higher
Answer: A
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In the above figure, if the interest rate is 2 percent per year, the quantity of money demanded is
A) greater than the quantity of money supplied, and the interest rate will change. B) greater than the quantity of money supplied, and the demand for money curve will shift. C) greater than the quantity of money supplied, and the supply of money curve will shift. D) less than the quantity of money supplied, and the interest rate will change. E) less than the quantity of money supplied, and the demand for money curve will shift.
Perfectly elastic demand curves are irrelevant, since real world demand curves are never perfectly elastic
a. True b. False
Assume the price of Nikes decreases. As a result, consumers increase the quantity of Nikes purchased each year and purchase fewer Reeboks. This is an example of the:
a. substitution effect. b. income effect. c. utility effect. d. consumption effect.
Refer to the information provided in Figure 1.4 below to answer the question(s) that follow.
Figure 1.4Refer to Figure 1.4. Which of the Panels shows a curve or line that has a slope that is negative and then positive?
A. A B. B C. C D. D