Assume that aggregate supply meets aggregate demand in the upward sloping portion of the AS curve. For each of the following, graph the change in aggregate supply and/or aggregate demand, and state the effect on prices and output. 1. The demand for U.S. exports increases. 2. Taxes increase. 3. Businesses become less optimistic about the future. 4. The labor force increases. 5. Costs of production
increase.
What will be an ideal response?
1. Aggregate demand increases; prices and output rise.
2. Aggregate demand decreases; prices and output fall.
3. Aggregate demand decreases; prices and output fall.
4. Aggregate supply increases (shifts rightward); prices fall and output rises.
5. Aggregate demand increases (shifts leftward); prices rise and output falls.
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Refer to Table 10-2. Using the table above, what is the approximate growth rate of real GDP from 2015 to 2016?
A) -2% B) -1% C) 1% D) 2%
An increase in the purchasing power of money would not, on average, result in an increase in the purchasing power of people's income because a ________ price level would likely mean ________ wages and salaries
A) falling; rising B) rising; falling C) falling; falling D) rising; rising
If Jen earns $80,000 a year and pays $16,000 in taxes, and Gary earns $100,000 a year and pays $16,000 a year in taxes, the tax system must be:
A. flat. B. proportional. C. progressive. D. lump-sum.
Assume most athletic apparel bought by U.S. consumers is imported from other nations. If all else is constant, an increase in the price of foreign-made athletic apparel will cause the U.S
a. consumer price index and GDP deflator to increase by exactly the same amount. b. GDP deflator to increase more than the consumer price index. c. consumer price index to increase more than the GDP deflator. d. GDP deflator to decrease less than the consumer price index.