The overall price level and real GDP both decline as one moves downward along the demand for money curve
Indicate whether the statement is true or false
false
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If three cell phone providers are in an agreement, this is an example of a ________ agreement.
A) vertical B) leftward C) horizontal D) rightward
Country X has experienced GDP growth of 4 percent and a population growth of 5 percent. What is this country's growth of per capita real GDP?
A) -1 percent B) 1 percent C) 9 percent D) -9 percent
Fiscal policy may end up being destabilizing to an economy because
A) there is never a long enough time lag. B) the economy is almost always at full employment. C) the President may have different goals than Congress. D) various time lags associated with fiscal policy cause the policy changes to take effect too late to solve the problem it was supposed to solve.
(Advanced analysis) Assume that the MPC is .8 in an economy that has an aggregate supply curve with a slope of 1. Also, suppose that the price level is flexible downward. A decrease in investment spending of $10 billion will shift the aggregate demand
curve leftward by: A. $50 billion and decrease real GDP by $50 billion. B. $50 billion and decrease real GDP by $25 billion. C. $10 billion and decrease real GDP by $10 billion. D. $10 billion and decrease real GDP by $25 billion.