Assume an economy is in equilibrium at a real GDP of $5 trillion. If aggregate expenditure (AE) increases by $1 trillion, the economy's equilibrium real GDP is likely to _____
a. increase by $1 trillion
b. increase by more than $1 trillion
c. increase by less than $1 trillion
d. decrease by $1 trillion
e. decrease by more than $1 trillion
b
You might also like to view...
Suppose that one can read a graph that shows information about price and quantity of some product. Relying solely on the graph, is it possible to explain the relationship between the two variables?
What will be an ideal response?
People who are risk averse
A) value a collection of assets only on the basis of its expected returns. B) value a collection of assets only on the basis of the risk of that return. C) value a collection of assets not only on the basis of its expected returns but also on the basis of the risk of that return. D) are less likely to invest in life insurance. E) are less likely to have a diverse portfolio.
Which of the following industries would most likely represent monopolistic competition?
a. clothing b. wheat c. water utilities d. soft drinks
Which of the following financial investments is highly liquid and has very little risk but offers a low rate of return?
a. Savings account b. Mutual fund c. Certificate of deposit d. Treasury bond