In Figure 20.2, if Aggregate Demand does not change, the increase in Real GDP will be accompanied by 

A. lower real wages.
B. no change in the price level.
C. a lower price level.
D. a higher price level.


Answer: C

Economics

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Explain how does an increase in the real exchange rate affect exports and imports?

What will be an ideal response?

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Business debt is an example of a lagging indicator

Indicate whether the statement is true or false

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When an external cost exists in the production of a good, firms tend to

A) under-produce the good since society pays these costs. B) over-produce the good. C) keep production constant throughout the year. D) under-allocate resources to the production of the good.

Economics

Refer to the data provided in Table 16.4 below to answer the following question(s).Table 16.4 shows the situation facing two firms, both of which are polluting. Assume that each firm emits 5 units of pollution.Table 16.4Firm AFirm AFirm AFirm BFirm BFirm BReduction of Pollution by Firm AMC of reducing pollution for Firm ATC of reducing pollution for Firm AReduction of Pollution by Firm BMC of reducing pollution for Firm BTC of reducing pollution for Firm B1$2$21$16$162  6  82 24  4031220332  724204044011253070548160Refer to Table 16.4. Suppose the government wants to reduce the total amount of pollution from the current level of 10 to 4. To do this, the government caps each firm's emissions at 2 units and issues 2 permits to each firm. If firms are allowed to trade permits, how

many permits will be traded between the two firms? A. B will buy two permits from A. B. A will buy two permits from B. C. B will buy one permit from A. D. A will buy one permit from B.

Economics