In the classical model
A. changes in aggregate demand affect only the price level, not real GDP.
B. a decrease in aggregate demand will lead to a decrease in the price level and a decrease in real GDP.
C. a decrease in aggregate demand will lead to an increase in the price level and a decrease in real GDP.
D. changes in aggregate supply leave real GDP unchanged.
Answer: A
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The above figure shows the market for anti-freeze. The government imposes the sales tax shown in the figure on sellers. What is the deadweight loss from this tax?
A) $1,500 B) $3,000 C) $4,500 D) $6,000
The ways to escape a prisoner's dilemma is to
A) make commitments and play the game repeatedly. B) collude. C) find a dominant strategy. D) give up the game.
In a free market, if the price of a good is above the equilibrium price, then;
A. sellers, dissatisfied with growing inventories, will raise their prices. B. buyers, hoping to ensure they acquire the good, will bid the price lower. C. sellers, dissatisfied with growing inventories, will lower their prices. D. the government will set a lower price to reestablish the market equilibrium.
Exhibit 12-1 Income distribution for three countries QuintileCountry I (%) Country II (%) Country III (%) Poorest 6 8 4 Second12 12 8 Third15 15 10 Fourth27 30 30 Richest40 35 48 Exhibit 12-1 shows the percentage of income received by each population quintile. From this chart we can conclude:
A. Country I has the most unequal income distribution. B. Country III has a more equal income distribution than Country II. C. Country II has the most unequal income distribution. D. Country II has the most equal income distribution.