A higher level of real Gross Domestic Product (GDP) will result if
A. leakage exceeds injections.
B. aggregate supply exceeds aggregate demand.
C. aggregate demand exceeds aggregate supply.
D. total planned real expenditures exceed real Gross Domestic Product (GDP).
Answer: D
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Interest rate parity occurs when
A) interest rates are equal across nations. B) interest rate differentials are always maintained across nations. C) interest rates no longer affect the exchange rate. D) prices are equal across nations when exchange rates are taken into account. E) the interest rate in one currency equals the interest rate in another currency when exchange rate changes are taken into account. The figure above shows the demand curve for dollars in the foreign exchange market.
On December 10 the price of a Christmas tree is $50 and 100 trees are purchased. On December 20 the demand for Christmas trees decreases so that the price falls to $30 and 20 trees are purchased. From this set of facts, the
A) demand for Christmas trees is price inelastic. B) demand for Christmas trees is price elastic. C) supply of Christmas trees is inelastic. D) supply of Christmas trees is elastic.
An increase in labor productivity necessarily means an increase in real GDP per capita if: a. real GDP increases
b. the employment growth rate is greater than the population growth rate. c. the employment growth rate is less than the population growth rate. d. the size of the labor force remains constant. e. real GDP increases more rapidly than nominal GDP.
Which of these does not hold true if an economy is simultaneously in long-run and short-run equilibrium? a. The actual price level equals the expected price level
b. Aggregate quantity supplied equals potential output. c. Aggregate quantity demanded equals potential output. d. Aggregate quantity supplied equals aggregate quantity demanded. e. Aggregate demand curve is horizontal at the potential output level.