Specifically, what might cause the quantity demanded of a particular good to double at a particular price?
What will be an ideal response?
This results from a rightward shift in the demand curve, which could be caused by an increase in consumer income, an increase in advertising expenditure, reduction in the price of a complementary good, or an increase in the price of a substitute good.
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Scarcity forces people to
A) cheat and steal. B) consume as much as they can as quickly as they can. C) choose among available alternatives. D) live at a low standard of living. E) be unwilling to help others.
Explain the difference between discretionary and automatic spending by the government.
What will be an ideal response?
If the prices of all goods and services rise during the year,
A. real GDP may fall. B. nominal GDP must rise. C. nominal GDP may increase. D. real GDP must rise.
Answer the following questions true (T) or false (F)
1. Suppose real GDP is $13 trillion and potential real GDP is $13.5 trillion. If Congress and the president increase government purchases by $500 billion, then the economy will be brought to equilibrium at potential real GDP. 2. In the case of an upward-sloping aggregate supply curve, the change in real GDP brought about by a change in government spending will be less than that predicted by the simple government purchases multiplier. 3. Crowding out refers to a decrease in government purchases as a result of an increase in private expenditures.