An increase in investment can lead to a greater increase in aggregate demand if the value of the spending multiplier is:
a. greater than 1
b. less than 1 but more than zero.
c. negative.
d. exactly equal to zero.
e. exactly equal to one.
a
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In the real business cycle model, an increase in current total factor productivity
A) increases investment demand. B) decreases investment demand. C) has no impact on investment demand. D) has an ambiguous effect on investment demand.
In the long run, foreign labor remains cheap when and if
a. it becomes highly efficient and competes successfully internationally. b. countries erect barriers to trade between poor countries. c. productivity increases more rapidly in poor countries than in rich countries. d. it remains inefficient compared to other countries' labor.
If nominal GDP is $8 trillion and real GDP is $10 trillion, then the GDP deflator is
a. 80, and this indicates that the price level has decreased by 20 percent since the base year. b. 80, and this indicates that the price level has increased by 80 percent since the base year. c. 125, and this indicates that the price level has increased by 25 percent since the base year. d. 125, and this indicates that the price level has increased by 125 percent since the base year.
Due to an economic recession, manufacturing firms began implementing layoffs of their workforces.
A. An increase in the price of automobiles will lead to a decrease in the quantity of automobiles demanded. B. Due to process innovations in computer chip manufacturing, the market supply of computers increased. C. Due to an economic recession, manufacturing firms began implementing layoffs of their workforces. D. Anticipating that the benefits would outweigh costs involved, an undergraduate student purchases the course textbook.