The software and related services sector has a multiplier effect on the Indian economy with every one rupee input spent by the "information technology sector" producing an increase in real GDP by two rupees. According to the story, if __________ in the software and related services sector increases by $15 billion, real GDP will increase by __________.
a) investment; $30 billion
b) consumption; $30 billion
c) consumption; $2 billion
d) investment; $2 billion
a) investment; $30 billion
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In the intermediate range of the aggregate supply curve, higher aggregate demand will increase:
a. both the price level and real GDP. b. real GDP without raising the price level. c. the price level without affecting real GDP. d. the price level but reduce real GDP.
Assume that the central bank purchases government securities in the open market. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to real GDP and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. There is not enough information to determine what happens to these two macroeconomic variables. b. Real GDP rises, and nominal value of the domestic currency rises. c. Real GDP rises, and nominal value of the domestic currency falls. d. Real GDP falls, and nominal value of the domestic currency rises. e. Real GDP rises, and nominal value of the domestic currency remains the same.
Other things the same, an increase in the price level causes the interest rate to
a. increase, the dollar to depreciate, and net exports to increase. b. increase, the dollar to appreciate, and net exports to decrease. c. decrease, the dollar to depreciate, and net exports to increase. d. decrease, the dollar to appreciate, and net exports to decrease.
A perfectly inelastic demand curve exhibits
A) zero responsiveness to changes in price. B) zero quantity demanded when there is a slight change in price. C) a change in quantity demanded that is proportional to the change in price. D) a change in quantity demanded that is always twenty percent of the change in price.