New Keynesian inflation dynamics predicts that an increase in aggregate demand will generate, in chronological order
A) a rightward movement along a horizontal short-run aggregate supply curve, a short-run increase in real GDP, an upward shift in the short-run aggregate supply curve, and an increase in the price level.
B) a leftward movement along a horizontal short-run aggregate supply curve, a short-run decline in real GDP, a downward shift in the short-run aggregate supply curve, and a decrease in the price level.
C) an leftward shift in a vertical short-run aggregate supply curve, a short-run decline in real GDP, an upward movement along the short-run aggregate supply curve, and an increase in the price level.
D) a rightward shift in a vertical short-run aggregate supply curve, a short-run increase in real GDP, an upward movement along the short-run aggregate supply curve, and an increase in the price level.
A
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Which of the following are primarily macroeconomic topics and which are primarily microeconomic topics?
a. college tuition rates b. farm subsidies c. national income d. automobile prices e. air traffic congestion f. economic recession
Economists use the term "potential output" to refer to ________
A) a level of output that has not yet been achieved B) the maximum level of output of which an economy is capable C) the sum of finished goods plus goods in production that will be finished within the year D) the level of output that occurs when all prices are fully adjusted E) none of the above
Keynes's absolute income hypothesis asserts that consumption
a. increases as income increases, but at a constant rate b. decreases as income increases, but at a constant rate c. increases as income decreases, but at a constant rate d. increases as income increases, but at a decreasing rate e. decreases as income increases, but at an increasing rate
The Condorcet paradox demonstrates that the order in which people vote on choices may influence the final outcome
a. True b. False Indicate whether the statement is true or false