If the nominal money supply doubles while real money demand is unchanged, what happens to the price level?
A. The price level is unchanged.
B. The price level falls by one-half.
C. The price level doubles.
D. The price level increases by a factor of four.
Answer: C
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Moving upward along the aggregate supply curve is equivalent to
A) moving downward along the short-run Phillips curve. B) shifting the short-run Phillips curve leftward. C) shifting the short-run Phillips curve upward. D) moving upward along the short-run Phillips curve. E) shifting the short-run Phillips curve rightward.
If we knew that nominal GDP was currently $7500 billion, and that current GDP in dollars of 1992 purchasing power was $5000 billion, what would we know about the GDP deflator?
A) It would be .667. B) It would be 150. C) Nothing until we had current information on the price level, such as consumer price index figures. D) Only that a dollar buys more currently than it bought in 1992. E) Only that a dollar currently buys less than it bought in 1992.
In Chapter 11, depreciation is assumed to be
A) a fixed proportion of real GDP. B) a fixed proportion of the capital stock. C) a fixed absolute amount. D) zero. E) a fixed proportion of the capital-labor ratio.
In their study of the effect of legalized abortion on crime rates, Steven Levitt and John Donohue applied
A. positive economic analysis. B. normative economic analysis. C. the principle of individual sovereignty. D. value judgments.