Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2.
B. P2 and Y2.
C. P3 and Y1.
D. P2 and Y3.
Answer: D
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You have a $500 saving bond. The nominal interest rate is 10 percent, and the inflation rate is 4 percent. After a year, in real terms you have earned
A) $70. B) $40. C) $50. D) $510. E) $30.
If a country imposes a tariff on an imported good, the tariff ________ the price in the importing country and ________ the quantity of imports
A) raises; decreases B) raises; increases C) raises; does not change D) lowers; does not change
The Nash equilibrium of this game is for Jet Cruises to ________ and Easy Sail to ________.
Jet Cruises wants to prevent Easy Sail from entering the sailboat market. The above game tree illustrates the different strategies and corresponding payoffs for the two firms. Both Jet Cruises and Easy Sail have the same strategies of advertising (Ad) or not advertising (No Ad). The payoffs represent net profit in millions.
A) Ad; Ad
B) No Ad; Ad
C) Ad; No Ad
D) No Ad; No Ad
When the economy enters a recession, unemployment insurance payments
a. fall, causing incomes and spending to fall more slowly than real GDP b. fall, causing incomes and spending to fall more rapidly than real GDP c. rise, causing incomes and spending to fall more rapidly than real GDP d. rise, causing incomes and spending to fall more slowly than real GDP e. fall, causing incomes and spending to fall at the same rate as real GDP