The index that measures the change in price of a typical basket of consumer goods is
a. the GDP deflator.
b. the consumer price index.
c. nominal GDP.
d. real GDP.
B
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Other things constant, the economy's aggregate demand curve shows that
A) as the price level falls, real GDP decreases. B) any change in the price level shifts the aggregate demand curve. C) the quantity of real GDP demanded decreases when the price level rises. D) the quantity of real GDP demanded and the price level are not related.
If a federal budget deficit causes crowding out, _____
a. real GDP does not increase by as much as the government purchases of goods and services multiplier would predict because the marginal propensity to consume decreases b. real GDP does not increase by as much as the government purchases of goods and services multiplier would predict because investment decreases c. interest rates fall, reducing the burden of the debt d. firms become more willing to invest e. interest rates fall, so that decreases in investment and government purchases of goods and services exactly offset the expansionary effect of the deficit
Many economists believe that
a. once a negative income tax system was in place, the United States could increase economic equality indefinitely without reducing economic efficiency. b. a negative income tax would be less efficient than the current welfare system. c. replacing the current welfare system with a negative income tax would increase both economic efficiency and economic equality. d. None of the above is correct.
Suppose that the labor market for high school chemistry teachers is initially in equilibrium. Chemistry teachers use laboratory chemicals as an important part of their jobs. New environmental regulations ban the use of many chemicals, which means that fewer laboratory chemicals are available for high school chemistry teachers to use in their jobs. In the market for high school chemistry teachers,
the equilibrium wage a. increases because the marginal productivity of high school chemistry teachers increases. b. decreases because the marginal productivity of high school chemistry teachers decreases. c. increases because the supply of high school chemistry teachers increases. d. decreases because the supply of high school chemistry teachers decreases.