GDP can rise as a result of a rise in , and Real GDP can rise as a result of a rise in .
A) prices or output; prices only.
B) prices only; prices or output.
C) prices or output; output only.
D) prices or output; prices or output.
Answer: C) prices or output; output only.
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Relative to before the price ceiling, how much surplus do producers lose because of the ceiling?
The following questions refer to the accompanying diagram which shows the effects of a price ceiling. The initial price and quantity are P0 and Q0, respectively, and the price ceiling is imposed at the price P1. Assume that none of the potential deadweight loss can be avoided.
a. Area D + E + H
b. Area D + E
c. Area D + E + F
d. Area H.
To evaluate relative changes in the net public debt, we must
A) look at the absolute amount owed by the government. B) compare it to the nation's real GDP. C) look at the annual percentage change in the public debt. D) compare it to the debts of all developed countries.
When M1 is expanded to M2, the money supply:
a. almost doubles. b. more than triples. c. goes up tenfold in size. d. changes very little. e. goes up by 50 percent.
An increase in the money supply should cause the expenditure schedule to shift upward.
Answer the following statement true (T) or false (F)