During recessions, the change in real GDP is:
A. always negative.
B. most often negative, but occasionally positive.
C. always positive.
D. most often positive, but occasionally negative.
Answer: B
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Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be:
A. P1 and Y2. B. P2 and Y3. C. P3 and Y1. D. P2 and Y2.
The smaller the MPS, the larger the multiplier.
Answer the following statement true (T) or false (F)
Refer to the figure below. In Venezuela, there are a very small number of extremely wealthy households and an extremely large number of very poor households. If the United States is represented by Lorenz curve c above, which curve would represent Venezuela?
A. a
B. b
C. c
D. d
If Boeing produces a plane in the United States, using some parts that it imports from other countries, and then exports that plane to another country, how will this production be counted in U.S. GDP?
A. The final value of the plane and the value of the imported parts will both be subtracted from GDP. B. The final value of the plane will be added to GDP. C. The value of the imported parts will be subtracted from GDP. D. The final value of the plane will be added to GDP, and the value of the imported parts will be subtracted from GDP.