Answer the following questions true (T) or false (F)

1. At a short-run macroeconomic equilibrium, real GDP is always equal to potential GDP.

2. Stagflation occurs when aggregate supply and aggregate demand both increase.

3. A decrease in government spending will result in a decrease in the price level and a decrease in real GDP in the long run.


1. FALSE
2. FALSE
3. FALSE

Economics

You might also like to view...

Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.

A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary

Economics

Investment pools gathered from a small number of very wealthy individuals or institutions are referred to as:

A) capital investment. B) institutional savings. C) fixed deposits. D) hedge funds.

Economics

If one person's use of a good diminishes another person's enjoyment of it, the good is

a. rival in consumption. b. excludable. c. normal. d. exhaustible.

Economics

The great Franco-American cheese war of 2009 began with:

A. beef. B. Swiss cheese quotas. C. camembert cheese tariffs. D. cheddar cheese import restrictions.

Economics