In the above figure, what is the short-run equilibrium real GDP and the short-run equilibrium price level?
What will be an ideal response?
The short-run equilibrium occurs where the AD curve intersects the SAS curve. So in the figure the short run equilibrium real GDP is $16.5 trillion and the short-run equilibrium price level is 110.
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With respect to the Keynesian liquidity trap, at very low levels of income, equilibrium in the money market occurs at points along the flat portion of the money demand schedule where
a. the elasticity of money demand is extremely high. b. money demand is associated with a low interest elasticity. c. money demand is completely interest inelastic. d. None of the above
During the 1960s, the inflation rate and the unemployment rate were inversely related
a. True b. False Indicate whether the statement is true or false
Which of the following is not a way for the government to solve the problem of excessive use of common resources?
a. regulation b. taxes c. turning the common resource into a public good d. turning the common resource into a private good
Average consumption in an economy is best measured by ________, while average productivity in an economy is best measured by ________.
A. output per person; output per worker B. total output; output per worker C. output per worker; total output D. output per worker; output per person