A study of the U.S. price level and real GDP from 1972 to 2007 reveals a clear upward march toward higher prices and greater output. What explains this?
A. Both the aggregate demand curve and the aggregate supply curve have shifted to the left year after year.
B. Both the aggregate demand curve and the aggregate supply curve have shifted to the right year after year.
C. The aggregate supply curve has shifted to the right, while the aggregate demand curve has shifted to the left.
D. The aggregate supply curve has shifted to the left, while the aggregate demand curve has shifted to the right.
Answer: B
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According to the textbook, the Fed's information is fairly imprecise in regards to all of these things except:
A. actual real GDP B. potential GDP C. size of output gaps D. speed of the effects of its actions
The price of a good will fall if
A) there is a surplus at the current price. B) the current price is less than the equilibrium price. C) the quantity demanded exceeds the quantity supplied. D) the price of a complement in consumption falls.
Pure economic rent is a payment to a resource that
A) has a high opportunity cost. B) has a perfectly inelastic supply. C) has a negative opportunity cost. D) has a perfectly elastic demand.
A price ceiling keeps a price:
a. from rising above a certain level. b. from decreasing below a certain level. c. at a stabilized point. d. from increasing or decreasing.