If a large percentage change in price leads to a smaller percentage change in quantity demanded, the result is a:
A. very elastic demand.
B. high magnitude of response.
C. less elastic demand.
D. low magnitude of response.
Answer: C
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During a demand-pull inflation, if the Fed tries to maintain a level of real GDP above potential GDP, the AD curve will ________ and the AS curve will ________
A) not shift; shift rightward continuously B) shift rightward continuously; shift rightward continuously C) shift rightward once; shift rightward continuously D) shift rightward continuously; not shift E) shift rightward continuously; shift leftward continuously
If there is zero search cost, then in the presence of asymmetric information, competitive firms will
A) charge the monopoly price. B) charge the competitive price. C) charge zero price. D) shut down.
The Keynesian mechanism through which monetary policy affects the price level, real GDP, and employment depends on the impact of the:
a. interest rate on savings. b. inflation on investment. c. interest rate on investment. d. interest rate on bond prices.
In dollar value, the nominal GDP in the United States is
a. between 5 and 6 billion. b. between 8 and 9 billion. c. between 8 and 10 trillion. d. between 13 and 15 trillion.