Equilibrium real GDP rises after the dollar strengthened. From this, we can conclude that
A) the increase in aggregate demand was greater than the decrease in aggregate supply.
B) the decrease in aggregate demand was less than the increase in aggregate supply.
C) the decrease in aggregate demand was more than the increase in aggregate supply.
D) the increase in aggregate demand was less than the decrease in aggregate supply.
B
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According to Keynesians, which of the following describes the cause-and-effect process by which changes in the money supply create changes in aggregate demand?
a. An increase in the money supply causes interest rates to fall, which causes investment to rise, which causes the aggregate demand curve to shift to the left b. A decrease in the money supply causes interest rates to rise, which causes investment to rise, which causes the aggregate demand curve to shift to the right. c. A decrease in the money supply causes interest rates to fall, which causes investment to rise, which causes the aggregate demand curve to shift to the right. d. An increase in the money supply causes interest rates to fall, which causes investment to rise, which causes the aggregate demand curve to shift to the right. e. An increase in the money supply causes interest rates to rise, which causes investment to rise, which causes the aggregate demand curve to shift to the right.
What is the difference between the short run and the long run as economists define the two?
The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
Briefly explain what real business cycle theorists believe causes the business cycle and give an example of how this takes place.
What will be an ideal response?