The horizontal axis in the AD-AS model shows:
A. the economy's nominal GDP growth rate.
B. the economy's short-term interest rate.
C. the economy's real GDP growth rate.
D. the economy's inflation rate.
Ans: C. the economy's real GDP growth rate.
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Carla's Candy Store is maximizing profits by producing 1,000 pounds of candy per day. If Carla's fixed costs unexpectedly increase and the market price remains constant, then the profit-maximizing level of output
a. is less than 1,000 pounds b. is still 1,000 pounds c. is more than 1,000 pounds d. will increase e. cannot be determined without more information
A tax cut can best be characterized as
A. Monetary policy only. B. Both monetary and supply-side policy. C. Fiscal policy only. D. Both fiscal and supply-side policy.
Insurance that pays all expenses generated by the insured activity is known as:
A. total-dollar insurance coverage. B. cradle-to-grave insurance coverage. C. last-dollar insurance coverage. D. first-dollar insurance coverage.
A budget surplus exists when
A. tax receipts < government expenditures + transfers. B. tax receipts > government expenditures + transfers. C. government expenditures ? transfers > tax receipts. D. government expenditures > transfers + tax receipts.