If no other national income variables change when ________ increase, then GDP will decrease.
A. investments
B. imports
C. amounts of solid waste
D. inventories
Answer: B
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The economy tends to be less stable with a __________ LM curve causing interest rates to be rather __________ to shifts in the IS curve
A) steeper; sensitive B) steeper; insensitive C) flatter; sensitive D) flatter; insensitive
According to liquidity preference theory, an increase in the price level would ________
A) increase the demand for real money balances B) decrease the supply of real money balances C) decrease the real interest rate D) all of the above E) none of the above
When a corrective tax is assessed, the costs of a firm’s pollution become ______.
a. public b. private c. zero d. fixed
In the figure above, what is the point price elasticity of demand when price is $80?
A. -0.50 B. -1.00 C. -2.00 D. -1.60 E. -0.75