Assume that the MPC is .9 and investment falls by $30 billion. What is the change in real GDP?
a. ?$300 billion
b. ?$270 billion
c. ?$93 billion
d. ?$39 billion
a
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The price level in the economy between 2014 and 2015 rose from 100 to 105. Between 2015 and 2016, the price level rose from 105 to 110.25. How does the short-run Phillips curve predict the unemployment rate will change as a result?
A) The unemployment rate will decrease since inflation decreased. B) The unemployment rate would not change since there is no change in the rate of inflation. C) The unemployment rate will increase since inflation increased. D) The unemployment rate will decrease since inflation increased.
Which of the following does not hinder economic development?
a. Lack of education b. Poor agricultural productivity c. Low investment in human capital d. Lack of technology e. Good nutrition
If the expected rate of inflation is zero, the real interest rate must
a. also equal zero. b. be greater than the money (nominal) interest rate. c. be equal to the money (nominal) interest rate. d. be less than the money (nominal) interest rate.
World commodity prices over the past 150 years have:
A. steadily decreased in both the short run and long run. B. decreased in the long run despite occasional short-run increases. C. remained constant in the long run despite occasional short-run fluctuations. D. steadily increased in both the short run and long run.