Classical economists believe that an increase in the money supply will lead to
a. a decrease in nominal GDP
b. a decrease in real GDP
c. a decrease in the price level
d. an increase in nominal GDP
e. an increase in real GDP
A
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Suppose production in an economy is represented by a Cobb-Douglas production function
If each worker in the economy becomes more productive while the number of workers in the economy, the capital stock and the state of technology remains unchanged, ________. A) the inflation rate in the economy will decrease B) the exchange value of its currency will increase in the foreign exchange market C) the income per capita of the economy will decrease D) the gross domestic product of the economy will increase
GDP in a country grew from $10 billion to $14 billion over the span of 5 years. The percentage change in GDP was
A) 4%. B) 7%. C) 10%. D) 40%.
Refer to the above figure. The profit maximizing quantity for this firm is
A) zero. B) Q1. C) Q2. D) Q3.
Under adaptive expectations theory, a decrease in the short-run aggregate demand curve ____ the inflation rate and ____ the unemployment rate.
A. increases; increases B. increases; decreases C. decreases; increases D. decreases; decreases