In the aggregate expenditures model, if an economy operates above equilibrium GDP, there will be:
a. unplanned inventory depletion.
b. an increase in GDP.
c. a decrease in employment.
d. an increase in employment.
c
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Drug interdiction, which reduces the supply of drugs, will likely be a less effective policy than educating consumers to reduce their demand for drugs because the drug interdiction policy will lower drug prices and reduce the quantity of drugs demanded
a. True b. False Indicate whether the statement is true or false
An economist left her $100,000-a-year teaching position to work fulltime in her own consulting business. In the first year, she had total revenue of $200,000 and business expenses of $150,000 . She made a (an):
a. economic profit. b. accounting loss but not an economic loss. c. implicit profit. d. economic loss.
In this graph, why does point B move up to point C?
a. In the short run, the increase in money supply leads to a higher price level, which causes the interest rate to lower.
b. In the long run, the increase in money supply leads to a lower price level, which causes the interest rate to rise.
c. In the short run, the increase in money supply has little effect on price level, which causes the interest rate to lower.
d. In the long run, the increase in money supply leads to a higher price level, which causes the interest rate to rise.
Suppose the government increases government spending. Which of the following will tend to occur as a result of this policy in a Keynesian model?
A. an inflationary gap B. a movement along the short-run aggregate supply curve C. demand-pull inflation D. all of these