Which of the following accurately describes an effect of hurricane Katrina on GDP?
A) GDP would increase reflecting the decrease in production that occurred during the storm and the productive capacity lost in the storm.
B) GDP would increase well-being.
C) GDP would increase reflecting the costs of cleanup.
D) GDP would decrease reflecting the costs of cleanup.
C
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Whenever an input makes up a large percentage of a good's final cost, an increase in that input's price will
A) affect total cost relatively more. B) not affect total revenues. C) affect only accounting profits. D) cause the firm to shutdown.
Use the following graph of the total demand for money to answer the next question.
Assume we begin at point a. An increase in the interest rate will can be shown as a move to ________.
A. point b B. point c C. point d D. point e
For Meg, the substitution effect of an interest-rate increase is stronger than the income effect. In response to a higher interest rate, will Meg save more or will she save less?
A leftward shift in aggregate demand will cause a decrease in both output and price level if aggregate supply is
A. Vertical. B. Horizontal. C. Downward-sloping to the right. D. Upward-sloping to the right.