When the ________ increases, then potential output increases.
A. long-run aggregate demand
B. long-run aggregate supply
C. short-run aggregate supply
D. short-run aggregate demand
Answer: B
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Sue offers to pay Al $50 for each painting of his that she sells in her gallery. Each painting sells for $75. The cost to Al of producing each painting is $55. Which of the following statements is TRUE about this contract?
A) This contract is efficient. B) This contract maximizes joint profit. C) Al will not participate in this contract. D) This is a fixed-fee contract.
A country can shift the production possibilities curve outward by ______.
a. discouraging entrepreneurial activity b. decreasing its population growth rate c. raising the standard of living d. improving and increasing its capital
Using the equation of exchange and assuming fixed price controls and a constant velocity of money, a decrease in the discount rate could temporarily result in
A. Higher quantity of real output. B. Higher velocity. C. Higher price level. D. Lower money supply.
According to the cumulative investment table above, if the real interest rate falls from 20% to 16%, then:
A. $180 billion of additional investments will be undertaken
B. $330 billion of total investments will be undertaken
C. $30 billion of additional investments will be undertaken
D. $440 billion of total investments will be undertaken