Aggregate demand in India increased in 2008. In addition, real GDP grew strongly and inflation approached 10 percent. The best explanation for this inflation is that
A) aggregate supply did not change.
B) potential GDP decreased.
C) there was a movement up along the aggregate demand curve in 2008.
D) potential GDP increased, but at a slower rate than aggregate demand.
D
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An individual is endowed with $100 of income in period 1, and will receive an income of 121 in period 2. The interest rate is 10%, and there are only 2 periods. The maximum second period consumption is
a) 100 b) 121 c) 221 d) 231 e) 233.1
Figure 6.5 illustrates the market for sugar. With free trade, total surplus in the market would be shown as area:
A. ABC. B. AEF. C. AEG. D. FEG.
Refer to the information provided in Table 33.5 below to answer the question(s) that follow. Cashews are measured in bushels and tea is measured in pounds (lbs.)
Table 33.5
Refer to Table 33.5. The most that Vietnam will be willing to pay for a bushel of cashews is
A. 5 lbs. of tea. B. 6.25 lbs. of tea. C. 7.5 lbs. of tea. D. 10 lbs. of tea.
A decrease in interest rates
A) increases the value of the dollar, net exports, and equilibrium output. B) increases the value of the dollar, reducing net exports and equilibrium output. C) reduces the value of the dollar, net exports, and equilibrium output. D) reduces the value of the dollar, increasing net exports and equilibrium output.