Fiscal policy actions that are intended to have long-run effects on real GDP attempt to increase ________ through changing ________
A) aggregate demand; government spending
B) aggregate supply; taxes
C) aggregate demand; taxes
D) aggregate supply; government spending
Answer: B
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If we are trying to determine if two different products are substitutes, complements, or not related at all, we should find the value of the
A) price elasticity of demand for both goods. B) price elasticity of supply for both goods. C) income elasticity of demand for both goods. D) cross elasticity of demand. E) price elasticity of demand and the price elasticity of supply for both goods.
The aggregate production function relating real GDP to labor hours
A) has a constant slope. B) has a negative slope. C) has a positive slope and becomes steeper as employment increases. D) has a positive slope and becomes less steep as employment increases.
Restricting demand will lower inflation but
A. aggravate the unemployment problem. B. reduce the unemployment rate. C. have no impact on the unemployment rate. D. None of the above is correct.
A binding price ceiling causes quantity demanded to be less than quantity supplied
a. True b. False Indicate whether the statement is true or false