A(n) ________ in aggregate demand will result from a decrease in ________
A) decrease; inflation
B) increase; taxes
C) increase; the budget deficit
D) increase; government purchases
B
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Suppose that aggregate demand increases along the upward sloping portion of the aggregate supply curve. What is the result?
A) Real GDP increases more than nominal GDP increases. B) Nominal GDP and real GDP increase by the same amount. C) Nominal GDP increases more than real GDP increases. D) Nominal GDP and real GDP decrease by the same amount.
In the specific factors model, the effects of trade on welfare are ________ for mobile factors, ________ for fixed factors used to produce the exported good, and ________ for fixed factors used to produce the imported good
A) ambiguous; positive; negative B) ambiguous; negative; positive C) positive; ambiguous; ambiguous D) negative; ambiguous; ambiguous E) positive; positive; positive
Which statement is true?
A. Middle-aged Americans have been saving at a higher rate than in the past. B. Home equity loans have been a source of funds to finance consumer spending. C. The Japanese savings rate is nearly twice the American saving rate. D. None of these statements are true.
Illustrate using a graph how the economy you depicted in (a) will adjust in the long run. On the graph identify the long run price level and the long run level of aggregate output. Explain verbally your results. In your answer make sure you comment on what is happening to wages and prices during this long run adjustment.
