In the short-run macro model, if GDP is $5 trillion and aggregate expenditure is $4 trillion,
a. GDP will rise because inventories will rise
b. GDP will fall because inventories will fall
c. GDP will remain the same because this is an equilibrium
d. investment will decrease
e. the government will have to increase taxes
B
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Money eliminates the need for a coincidence of wants in trading primarily through its role as a
A. store of value. B. unit of account. C. medium of deferred payment. D. medium of exchange.
What is meant by a speculative bubble?
a. A pattern in past stock prices that, according to technical analysts, indicates higher future prices. b. A circumstance where everyone expects higher prices, which in turn causes higher prices. c. An occasional occurrence in program trading in which many investors simultaneously receive instructions to sell. d. A situation where poorly informed traders exacerbate any upturns or downturns in the market.
A normal good is one
A) with a downward sloping demand curve. B) for which demand increases when the price of a substitute rises. C) for which demand increases when income increases. D) none of the above
If the expected inflation rate is unchanged, a fall in the natural rate of unemployment would
A) shift the short-run Phillips curve to the right. B) not shift the short-run Phillips curve. C) shift the short-run Phillips curve to the left. D) shift the short-run Phillips curve to the left and shift the long-run Phillips curve to the right.