The net effect of a stronger dollar on real GDP is
A) an increase in the price level.
B) dependent on whether the increase in aggregate supply is more or less than the decrease in aggregate demand.
C) a decrease in real GDP.
D) an increase in real GDP.
B
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What are the categories of expenditure used in the expenditure approach to measuring GDP?
What will be an ideal response?
Once an equilibrium is achieved, it can persist indefinitely because
A) shocks that shift the demand curve or the supply curve cannot occur. B) shocks to the demand curve are always exactly offset by shocks to the supply curve. C) the government never intervenes in markets at equilibrium. D) in the absence of supply/demand shocks no one applies pressure to change the price.
An economy produces capital goods and consumer goods. This economy is operating at a point on its production possibility frontier associated with a large amount of capital goods and a small amount of consumer goods. This is most likely to be a
A. "poor" country because such a nation has difficulty devoting many resources to the production of consumer goods. B. country with a free market. C. country with a command economy. D. "rich" country because such a nation can afford to sacrifice.
The cost to firms of changing prices
A) is small even when there is rapid inflation. B) is called a menu cost. C) does not exist if inflation is perfectly anticipated. D) all of the above