When PAE increases we expect that economy will be at ________ levels of equilibrium GDP.

A. higher
B. cycling
C. constant
D. lower


Answer: A

Economics

You might also like to view...

Suppose the government wants to discourage excessive consumption of alcohol. It therefore imposes a per-unit tax on alcohol that increases as more alcohol is bought by a consumer at a store. What happens to a consumer's budget at a liquor store (with liters of alcohol on the horizontal axis and a composite good on the vertical) --- assuming the consumer takes only one trip to the store.

A. The vertical intercept decreases and the slope becomes shallower as more alcohol is bought. B. The vertical intercept remains constant but the slope becomes shallower as more alcohol is bought. C. The vertical intercept decreases and the slope becomes steeper as more alcohol is bought. D. The vertical intercept remains constant but the slope becomes steeper as more alcohol is bought. E. None of the above.

Economics

The German central bank, the Bundesbank, faced the risk of increased inflation caused by its actions to support an overvalued deutsche mark in the 1960s

Indicate whether the statement is true or false

Economics

From the Cobb-Douglas production function we learn that there are two sources that help explain cross-country differences in per capita income: ________ and ________

A) capital; labor productivity B) labor share of income; TFP C) TFP; capital per person D) labor per person; capital E) none of the above

Economics

Suppose a perfectly competitive firm's production function is q = L0.2K0.6 and it takes the wage and price as given. Then the firm's long-run demand for labor as a function of K, w, and p is

A) p5((0.2/w)2(0.6/r)3). B) p5((0.2/w)4(0.6/r)5). C) p5((0.2/w)5(0.6/r)4). D) p5((0.2/w)3(0.6/r)2).

Economics