Price supports:
A. decrease pollution because participants must practice organic farming.
B. neither increase nor decrease environmental pollution.
C. increase pollution because supports encourage the cultivation of marginal land and the use
of more pesticides and fertilizers.
D. discourage rent-seeking activity.
Answer: C
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According to the real business cycle model
A) increases in aggregate demand do not affect GDP. B) increases in aggregate demand lower the price level. C) increases in aggregate demand raise GDP. D) increases in aggregate demand lower GDP.
Which of the following commodities have a high short-run own-price elasticity of supply?
a. Livestock b. Petroleum c. Food crops d. Diamonds
According to the Keynesian view, an unanticipated reduction in spending will
a. increase the demand for goods and services. b. raise business inventories and lead to a decline in output. c. lead to lower interest rates, which will stimulate aggregate demand and keep the economy at full employment. d. lead to a lower price level, which will quickly guide the economy to full-employment equilibrium.
If U.S. real GDP increases by 3.3 percent, we can infer that the United States experienced:
A. a recession B. an expansion C. a depression D. a trough