A decrease in the price of resources will cause the aggregate supply curve to
A. shift outward.
B. shift inward.
C. become flatter.
D. become steeper.
Answer: A
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Which of the following represents the chain of causation for expansionary policy?
A. An increase in real GDP increases investment, which increases the money supply, which reduces the interest rate. B. An increase in the money supply reduces the interest rate, which increases investment, which increases real GDP. C. An increase in investment increases the interest rate, which increases the money supply, which increases real GDP. D. An increase in the money supply increases investment, which increases the interest rate, which increases real GDP.
New Keynesian inflation dynamics can account for sluggish responses of
A) real GDP to variations in aggregate supply. B) real GDP to variations in aggregate demand. C) inflation to variations in aggregate supply. D) inflation to variations in aggregate demand.
In calculating a price index, the period to which prices in all other periods are compared is known as the
a. comparison period. b. average period. c. current period. d. base period.
In the median voter model, we assume that
A) voters will vote for the friendlier of two candidates. B) voters will vote for the candidate who comes closer to matching their views. C) the candidate who occupies the far right has a better chance of winning the election than the candidate who occupies the far left. D) there are three candidates running for the same office. E) b and c