According to the real business cycle model
A) increases in aggregate demand raise GDP.
B) increases in aggregate demand lower GDP.
C) increases in aggregate demand do not affect GDP.
D) increases in aggregate demand lower the price level.
Answer: C
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The indifference curves in the figure above (I1, I2, and I3 ) reflect Peter's consumption preferences
If Peter consumes 24 slices of pizza and 24 chocolate bars per month, he as satisfied as he would be consuming ________ slices of pizza and ________ chocolate bars per month. A) 48; 12 B) 40; 20 C) 32; 8 D) 16; 16
Show what happens to the industry equilibrium when new firms enter a perfectly competitive market in the long run.
What will be an ideal response?
When a shortage occurs in the market for a good, quantity
A. demanded exceeds quantity supplied and the market mechanism pushes the price up, which in turn encourages more production and less consumption. B. supplied exceeds quantity demanded and the price falls, which encourages more production and less consumption. C. demanded exceeds quantity supplied and the market mechanism pushes the price down, which encourages more production and less consumption. D. supplied exceeds quantity demanded and the price rises, which encourages more production and less consumption.
Under the gold standard, a country with a trade deficit should expect
a. gold to flow out of the country to other countries. b. gold to flow into the country from other countries. c. the value of its currency to appreciate. d. the value of its currency to depreciate.