Which of the following would generally cause firms to expand output in the short run?
a. a proportional increase in the prices of goods and services and the costs of producing them
b. higher profit margins as the result of an unexpected increase in the prices of goods and services
c. an unexpected reduction in aggregate demand
d. an increase in wages and the prices of other resources
B
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In the United States during the Vietnam War era, as military spending increased
A) unemployment dropped to very low levels. B) frictional unemployment dropped, but cyclical unemployment increased. C) both frictional and cyclical unemployment increased. D) overall unemployment rates did not change.
The table gives data on the production and prices in a small economy. Use 2012 as the base period
a. What does nominal GDP equal in 2012? b. What does real GDP equal in 2012? c. What does nominal GDP equal in 2013? d. Using the chained-price method, what does real GDP equal in 2013?
If the CPI in 2004 is 200, and in 2005 the CPI is 180, the rate of inflation from 2004 to 2005 is
A) 20%. B) 10%. C) 0%. D) -10%.
An increase in income will tend to cause which of the following?
A) an increase in the monetary base (H) B) a reduction in H C) an increase in the interest rate D) a reduction in the money multiplier E) none of the above