In the income-expenditure model, at equilibrium GDP
a. either unemployment or inflation may occur.
b. inflation can occur but unemployment cannot.
c. unemployment can occur but inflation cannot.
d. both unemployment and inflation are impossible.
a
You might also like to view...
According to the Ricardian equivalence theorem, a tax cut that increases the government budget deficit will have
A) a positive effect on aggregate demand because people look at changes in taxes or government spending in the present. B) no effect on aggregate demand because people only look at changes in taxes or government spending in the present. C) no effect on aggregate demand because people realize that there will be a future tax liability so that there is no increase in consumption expenditures. D) an effect on aggregate demand. The magnitude the effect will have depends upon whether the increase is caused by a reduction in taxes or an increase in government spending.
If a firm sets marginal revenue equal to marginal cost, it will make an economic profit
Indicate whether the statement is true or false
The value-added approach of calculating GDP:
A. is especially useful when thinking about services involved in the resale of existing goods. B. lets us break down the total value paid and see how much of it was created at each step of the production process. C. is an alternative, and equally valid, way of avoiding the problem of double-counting. D. All of these are correct.
The results of a survey conducted by Dan Ariely and Michael Norton found that Americans
A) have a preference for much greater equality in wealth distribution than currently exists. B) have a preference for much less equality in wealth distribution than currently exists. C) have a preference for roughly the amount equality in wealth distribution that currently exists. D) show absolutely no preference for the amount of equality in wealth distribution in the nation.