What might be the short run impact of a completely open immigration policy that allowed labor to move freely across the U.S. border?
A. A decrease in real GDP growth caused by an increase in the labor force
B. An increase in real GDP growth caused by an increase in the labor force
C. An increase in real GDP growth caused by an increase in demand for public goods
D. A decrease in real GDP growth caused by an increase in demand for public goods
Answer: B
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
Refer to Figure 13-3. Which of the points in the above graph are possible short-run equilibria but not long-run equilibria? Assume that Y1 represents potential GDP
A) A and B B) B and D C) A and C D) C and D
To calculate the growth rate of a variable, you will
A) calculate the percentage change from one time period to the next. B) calculate the difference between the two variables. C) add the ending value to the beginning value. D) divide the increase by the number of time periods.
Calculate the elasticity of demand when an increase in supply causes the equilibrium price and quantity to change from $9 and 2,000 to $7 and 3,000, respectively