Suppose that real domestic output in an economy is 300 units, the quantity of inputs is 50, and the price of each input is $9. If the price of each input decreased from $9 to $7, productivity would:
A. remain unchanged and aggregate supply would increase.
B. remain unchanged and aggregate supply would decrease.
C. increase and aggregate supply would increase.
D. decrease and aggregate supply would decrease.
Answer: A
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As interest rates rise, the quantity of money demanded
A) falls. B) rises. C) stays the same. D) does not react to interest rate changes.
If real GDP increases and the price index also increases: a. nominal GDP must also have risen
b. nominal GDP must have fallen. c. nominal GDP could have either risen or fallen. d. the percentage increase in nominal GDP must have been greater than the percentage increase in the price level.
Other things equal, a country's long-run aggregate supply will shift to the left when _____
a. the aggregate expenditure on education rises b. the productivity of labor rises c. the quantity of natural resources rises d. the mortality rate rises e. the amount of investment rises
A country can attempt to increase its capital stock by
a. shifting resources away from capital goods toward consumer goods b. shifting resources away from human capital goods toward physical capital goods c. shifting resources away from consumer goods toward capital goods d. shifting resources away from physical capital goods toward human capital goods e. shifting resources away from consuming tomorrow toward consuming today