If the aggregate supply curve is flat,
a. contractionary fiscal or monetary policy will reduce inflation with little effect on real GDP.
b. contractionary fiscal or monetary policy will cause significantly less inflation.
c. expansionary fiscal or monetary policy will add significantly to real GDP will little effect on inflation.
d. expansionary fiscal or monetary policy will add little to real GDP but will increase inflation significantly.
c
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The figure above shows Clara's demand for CDs. If the price of a CD were to increase from $15 to $25, Clara's total consumer surplus for all the CDs she buys would
A) decrease by $40. B) remain unchanged. C) decrease by $90. D) increase by $80.
A cable company can add a subscriber for ________ and a market failure occurs because the price charged ________
A) nearly zero marginal cost; exceeds marginal cost B) less than average cost; reduces consumer surplus C) nearly zero marginal cost; is extortionist D) average variable cost; increases producer surplus
The U.S. dollar is backed by ____________.
Fill in the blank(s) with the appropriate word(s).
If real GDP grows at a rate of 6 percent and population grows at a rate of 2 percent, then real GDP per person grows at a rate of
A) -3 percent. B) 8 percent. C) 2 percent. D) 4 percent. E) 0.5 percent.