Refer to Figure 16-1. Suppose the economy is in short-run equilibrium above potential GDP and automatic stabilizers move the economy back to long-run equilibrium
Using the static AD-AS model in the figure above, this would be depicted as a movement from
A) D to C. B) B to A. C) C to B. D) E to A. E) A to E.
C
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An increase in taxes will increase total planned expenditures for goods and services
Indicate whether the statement is true or false
Higher unemployment tends to be associated with
A) the classical model. B) higher real GDP. C) higher nominal GDP. D) lower real GDP.
When the economy is producing Real GDP at the level at which the LRAS curve intersects the AD curve the economy is
A) in a recessionary gap. B) in long-run equilibrium. C) in an inflationary gap. D) operating at less than full-employment output.
Holding everything else constant, a country's imports will decrease if the:
A) country's currency appreciates.
B) country's currency depreciates.
C) country's currency is revalued.
D) none of the above.