At points above the IS curve, there is an ________ and at points below the IS curve there is an
A. excess supply of goods; excess demand for goods.
B. excess supply of money; excess demand for money.
C. excess demand for money; excess supply of money.
D. excess demand for goods; excess supply of goods.
Answer: A
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State how shifts in the aggregate demand curve can explain the movement of real GDP around potential GDP
What will be an ideal response?
Money as a medium of exchangeI.Facilitates the exchange of goodsII.Reduces the incentive to barter
A. I only B. II only C. Both I and II D. Neither I nor II
The government policy that does not increase economic growth is
A. incentives to firms in the form of investment tax credits that can take the economy out of a low saving-investment trap B. foreign trade policy that favors imposing a high tariff on imported high-tech goods C. better health and education policies that provide free childhood vaccination, water purification, and K-12 public education D. policy concerning property rights and rules of law that can free the country from corruption and political instability
The percentage change in quantity supplied that results from a 1 percent change in price is known as the:
A. slope of the supply curve. B. cross-price elasticity of supply. C. cross-price elasticity of demand D. price elasticity of supply