Aggregate demand ________ and shifts the AD curve ________ when ________.
A. increases; leftward; taxes increase
B. increases; rightward; foreign incomes increase
C. increases; rightward; government expenditure increases
D. increases; rightward; taxes increase
E. decreases; leftward; the price level rises
Answer: C. increases; rightward; government expenditure increases
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Jordan recently quit her job as a marketing consultant in Washington, D.C. and is looking for a better-paying job with an advertising agency in New York. Jordan is considered to be
A) cyclically unemployed. B) structurally unemployed. C) not in the labor force. D) frictionally unemployed. E) a discouraged worker.
The theory of PPP suggests that if one country's price level falls relative to another's, its currency should
A) depreciate. B) appreciate. C) float. D) do none of the above.
A characteristic of outsourcing is
a. essentially the opposite of vertical integration b. likely to be profitable exactly when vertical integration is profitable c. it prevents a firm from focusing on its core competencies d. it prevents the exploitation of differing degrees of economies of scale at different points in the supply chain
Under the rational expectations hypothesis, which of the following is the most likely short-run effect of a move to expansionary monetary policy?
a. A higher general level of prices but no change in real output b. A higher general level of prices and an expansion in real output c. No change in the general level of prices and a reduction in real output d. No change in either the general level of prices or real output