Based on the graph showing rational expectations and the AD/AS model, how do shifts in the short-run aggregate supply and aggregate demand curves influence RGDP?
a. Since both curves move to the left, RGDP decreases.
b. Since both curves move to the right, RGDP increases.
c. Since the curves move equally in opposite directions, RGDP does not change.
d. Since both curves become vertical, RGDP becomes zero.
c. Since the curves move equally in opposite directions, RGDP does not change.
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Whenever statements embodying values are made, we enter the realm of
A) positive economics. B) normative economics. C) microeconomics. D) macroeconomics.
Which of the following variables are assumed to be more or less constant in the quantity theory of money equation?
a. The price level b. The real GDP c. The money supply d. The nominal GDP e. The velocity of money
Suppose government expenditures on goods and services and net taxes both decrease, and expenditures fall by more than net taxes. The effects of these changes on the budget deficit cause
a. both the equilibrium interest rate and the equilibrium quantity of loanable funds to fall. b. both the equilibrium interest rate and the equilibrium quantity of loanable funds to rise. c. the equilibrium interest rate to rise and the equilibrium quantity of loanable funds to fall. d. the equilibrium interest rate to fall and the equilibrium quantity of loanable funds to rise.
Sylvia allocates her monthly income between Food and Housing. Her budget share spent on food in a given month is always 30%, and for Sylvia, food is a "necessity" (income elasticity between zero and one)
Derive the maximum and minimum values for the income elasticity of demand for housing.