Real GDP will increase

a. only when prices increase.
b. only when output increases.
c. when prices increase or output increases.
d. All of the above are correct.


b

Economics

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Which of the following is a true statement about the multiplier?

a. The multiplier rises as the MPC rises. b. The smaller the MPC, the larger the multiplier. c. The multiplier is a value between zero and one. d. The multiplier effect does not occur when autonomous expenditure decreases.

Economics

A year-long drought that destroys most wheat crops for the season would shift the:

A. aggregate demand curve only. B. aggregate demand curve, and the short-run aggregate supply curve would shift in response. C. short-run aggregate supply curve only. D. short-run aggregate supply curve and the long-run aggregate supply curve.

Economics

The invisible hand enforces the tendency toward

a. MR = MU. b. MC = P = MU. c. MC = MPP = P. d. MRP = MPP = P.

Economics

There are two states of the world. The person receives $100 in state one which occurs with probability 0.6. If the person is rational and their expected return is $80, then in state two the person must receive

a. $20 b. $25 c. $50 d. $100

Economics