The table below shows data for India's economy. Real GDP is measured in millions of rupees. Suppose that full employment occurs when real GDP is 27,000 million rupees
Price level Real GDP
supplied in the short run Real GDP demanded
a 114 23,501 35,898
b 120 25,355 32,341
c 125 27,670 27,670
d 131 30,366 18,569
e 138 33,164 15,898
The economy is experiencing ________ gap and firms will ________.
A) an inflationary gap; increase production
B) an inflationary gap; increase money wages paid to workers
C) a recessionary gap; increase production
D) a recessionary gap; decrease money wages paid to workers
B
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The numerical value of the MPC is typically
A. less than 1. B. equal to 1. C. greater than 1. D. unpredictable.
The nominal interest rate minus the inflation rate is the
A) depreciation rate. B) real interest rate. C) discount rate. D) forward rate.
An in-kind transfer is a
A. transfer made by people to be kind to others. B. transfer of wealth. C. transfer of goods and services instead of cash. D. system of clearing checks by local banks.
One of the causes of World War I was _________
a. the deteriorating standards of living in Europe. b. the assassination in Serbia of Austrian Archduke Ferdinand. c. Europe had experienced several wars in recent decades that spilled over into World War I. d. the European working class was increasingly fractured and nationalistic.