Refer to Scenario 1 . If you start the course in such a way that each exam score is better than your previous average what should happen to your average score?
What would happen to your average if it was below your previous exam score? Explain.
Your average would continue to rise. If you received a score on one examination that was lower than the previous exam score there wouldn't be any way to determine what would happen to your average unless you knew what this score was compared to your previous average, not your previous exam score.
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The U.S. economy is the largest in the world. What two factors primarily explain this? What makes the U.S. economy unique?
What will be an ideal response?
An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
When the SRAS curve slopes upward, the actual affect of an increase in real autonomous spending on equilibrium real GDP is smaller than predicted by the multiplier because
A) the price level rises B) the price level falls. C) real GDP increases. D) real GDP decreases.
Suppose the velocity of money is not fixed, but stable at about 4% growth per year
How could the quantity theory of money be modified to include a stable growth rate of the velocity of money? In this modified version with velocity growing at about 4% per year, what would the growth rate of the other variables need to be to cause inflation?