An increase in productivity will:
A. increase aggregate supply and aggregate demand.
B. increase aggregate demand.
C. decrease aggregate supply and aggregate demand.
D. increase aggregate supply.
Answer: D
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Policy making that is carried out in response to a rule is
A) restrictive policy making. B) passive policy making. C) determined policy making. D) active policy making.
What is a private cost of production? What is an external cost of production? What is a social cost of production? When is the private cost of production equal to the social cost of production?
What will be an ideal response?
Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
If a country has a trade surplus then
a. S > I and Y > C + I + G. b. S > I and Y < C + I + G. c. S < I and Y > C + I + G. d. S < I and Y < C + I + G.