Beginning from a position of long-run equilibrium, suppose there is an increase in the aggregate demand curve. After adjustment and comparing the economy's new long-run equilibrium with its original long-run position, the result would be an increase in:
a. real GDP
b. the price level (CPI).
c. the unemployment rate.
d. a and b, but not c.
b
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Inflation decreases the growth of capital because
i. when the after-tax real interest rate falls, savings decreases. ii. velocity increases when inflation increases. iii. the higher the inflation rate, the higher is the true income tax rate on income from capital. A) i only B) ii only C) iii only D) i and iii E) i, ii, and iii
A consumer has $1,000 a week to spend on renting square feet of housing (at a price of $5 per square foot) and eating out (at a price of $20 per meal). With square feet of housing on the horizontal and meals on the vertical axis, what is the vertical intercept and what is the slope of this consumer's budget constraint?
What will be an ideal response?
The strategy that worked best in Axelrod's experiments using the Prisoners' Dilemma game was to
A) play the "cooperate" ("don't confess") strategy. B) play the "defect" ("confess") strategy. C) alternate between "cooperate" and "defect" strategies. D) play the "cooperate" strategy at first, and from then on do whatever the other player did in the previous round, cooperating if the other player did, and defecting if the other player did. E) play the "cooperate" strategy in the first round, and from then on cooperate so long as the other player does, but if the other player defects, then play the "defect" strategy from that time forward.
John Maynard Keynes believed that the government should play a role in fighting both unemployment and inflation.
Answer the following statement true (T) or false (F)