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240 Cards in this Set
- Front
- Back
Which of the following explains why production rises in most years? |
D. All of the above |
|
On average over the past 50 years, the U.S. economy has grown at the rate of about |
B. 3% per year |
|
A short period of falling incomes and rising unemployment is called a |
B. Recession |
|
During recessions |
D. All of the above |
|
During a recession the economy experiences |
D. Falling employment and income |
|
Which of the following is correct? |
D. None of the above |
|
Which of the following is correct? |
C. During recessions, sales and profits tend to fall. |
|
During recessions |
a. sales and profits fall. |
|
Which of the following typically rises during a recession? |
b. unemployment |
|
Most economists use the aggregate demand and aggregate supply model primarily to analyze |
a. short-run fluctuations in the economy. |
|
Real GDP |
b. measures economic activity and income. |
|
Real GDP |
c. also measures real income. |
|
As recessions begin, production |
c. falls and unemployment rises. |
|
During recessions investment |
a. falls by a larger percentage than GDP. |
|
Which of the following is correct concerning recessions? |
b. They are associated with comparatively large declines in investment spending. |
|
Historically, the change in real GDP during recessions has been |
a. mostly a change in investment spending. |
|
Which part of real GDP fluctuates most over the course of the business cycle? |
c. investment expenditures |
|
During recessions declines in investment account for about |
d. 2/3 of the decline in real GDP. |
|
Investment is a |
b. small part of real GDP, yet it accounts for a large share of the fluctuation in real GDP. |
|
In 2001, the United States was in recession. Which of the following things would you expect not to have |
d. increased investment spending |
|
Below are pairs of GDP growth rates and unemployment rates. Economists would be shocked to see most of these |
c. -1 percent, 6 percent |
|
Below are pairs of GDP growth rates and unemployment rates. Economists would be shocked to see most of these |
b. 3 percent, 5 percent |
|
In the last half of 1999, the U.S. unemployment rate was about 4 percent. Historical experience suggests that this is |
d. below the natural rate, so that real GDP growth was likely high. |
|
During the last half of 1980, the U.S. unemployment rate was about 7.5 percent. Historical experience suggests that |
a. above the natural rate, so that real GDP growth was likely low. |
|
The classical dichotomy refers to the separation of |
d. real and nominal variables. |
|
According to classical macroeconomic theory, changes in the money supply affect |
b. nominal variables, but not real variables. |
|
According to classical macroeconomic theory, changes in the money supply affect |
c. the price level, but not real GDP. |
|
To say that money is a veil means that |
a. while nominal variables are the first thing we may observe about an economy, what’s important are the real |
|
Most economists believe that classical macroeconomic theory is a good description of the world |
d. in the long run, but not in the short run. |
|
Most economists believe that after a few years, changes in the money supply change |
a. only nominal variables, but not real variables. |
|
Real and nominal variables are highly intertwined, and changes in the money supply change real GDP. Most |
b. the short run, but not the long run. |
|
The quantity of money has no real impact on things people really care about like whether or not they have a job. |
c. the long run, but not the short run. |
|
Classical economist David Hume observed that as the money supply expanded after gold discoveries it took some |
c. monetary neutrality would mean the prices should have risen, but production should not have changed. |
|
The model of short-run economic fluctuations focuses on the price level and |
a. real GDP. |
|
The average price level is measured by |
d. the CPI or the GDP deflator |
|
The model of aggregate demand and aggregate supply explains the relationship between |
d. real GDP and the price level |
|
The variables on the vertical and horizontal axes of the aggregate demand and supply graph are |
a. the price level, real output. |
|
Which of the sentences concerning the aggregate demand and aggregate supply model is correct? |
b. The price level and quantity of output adjust to bring aggregate demand and supply into balance. |
|
Which of the following adjusts to bring aggregate supply and demand into balance? |
a. the price level and real output |
|
The aggregate demand curve |
c. shows an inverse relation between the price level and the quantity of all goods and services demanded. |
|
Other things the same, a fall in the economy's overall level of prices tends to |
b. raise the quantity demanded of goods and services, but lower the quantity supplied. |
|
As the price level rises |
d. people will want to buy fewer bonds, so the interest rate rises. |
|
Which of the following is included in the aggregate demand for goods and services? |
d. All of the above are correct |
|
Which of the following is not included in aggregate demand? |
a. purchases of stock and bonds |
|
The effect of an increase in the price level on aggregate demand is represented by a |
c. movement to the left along a given aggregate demand curve. |
|
The wealth effect, interest rate effect, and exchange rate effect are all explanations for |
c. the slope of the aggregate demand curve. |
|
Other things the same, as the price level falls, |
c. a dollar buys more domestic goods. |
|
Other things the same, as the price level rises, the real value of a dollar |
c. falls, and interest rates rise. |
|
Other things the same, as the price level falls, the real value of a dollar |
b. rises, and interest rates fall. |
|
Other things the same, as the price level falls, a country's exchange rate |
b. and interest rates fall. |
|
Other things the same, as the price level rises, exchange rates |
a. and interest rates rise. |
|
Other things the same, as the price level rises, the real value of money |
d. falls and the exchange rate rises. |
|
Other things the same, an increase in the price level makes consumers feel |
a. less wealthy, so the quantity of goods and services demanded falls. |
|
Other things the same, a decrease in the price level makes the dollars people hold worth |
a. more, so they are willing to spend more. |
|
Other things the same, an increase in the price level makes the dollars people hold worth |
d. less, so they spend less. |
|
People will spend more if the price level |
c. falls because falling prices increase the real value of a dollar. |
|
People will spend more if real wealth |
b. rises and interest rates fall. |
|
Other things the same, if the price level falls, households |
a. increase foreign bond purchases, so the supply of dollars in the market for foreign-currency exchange |
|
Other things the same, if the price level rises, households |
d. decrease foreign bond purchases, so the supply of dollars in the market for foreign-currency exchange |
|
Other things the same, the aggregate quantity of goods demanded in the U.S. increases if |
c. the dollar depreciates. |
|
Other things the same, the aggregate quantity of goods demanded in the U.S. increases if |
a. real wealth rises. |
|
Other things the same, the aggregate quantity of goods demanded decreases if |
d. All of the above are correct |
|
Other things the same, a decrease in the price level induces people to hold |
b. less money, so they lend more, and the interest rate falls. |
|
Other things the same, an increase in the price level induces people to hold |
d. more money, so they lend less, and the interest rate rises. |
|
Other things the same, when the price level rises, |
b. interest rates rise, so firms decrease investment. |
|
Other things the same, when the price level falls, interest rates |
c. fall, so firms increase investment. |
|
Other things the same, as the price level falls, which of the following increases? |
a. lending and investment spending |
|
Investment spending decreases when the price level |
a. rises and interest rates rise. |
|
Other things the same, a decrease in the U.S. price level leads to |
c. a fall in U.S. interest rates and increased demand for foreign bonds. |
|
Other things the same, a decrease in the price level causes real wealth to |
d. rise, interest rates to fall, and the dollar to depreciate. |
|
Other things the same, a decrease in the price level causes the interest rate to |
c. decrease, the dollar to depreciate, and net exports to increase. |
|
An increase in the price level causes the interest rate to |
b. increase, the dollar to appreciate, and net exports to decrease. |
|
When the dollar depreciates, U.S. |
b. exports increase, while imports decrease. |
|
When the dollar appreciates, U.S. |
a. exports decrease, while imports increase. |
|
When the dollar depreciates, each dollar buys |
d. less foreign currency, and so buys fewer foreign goods. |
|
A decrease in U.S. interest rates leads to |
a. a depreciation of the dollar that leads to greater net exports. |
|
An increase in the interest rate causes investment to |
d. fall and the exchange rate to appreciate |
|
Other things the same, as the price level decreases it induces greater spending on |
a. both net exports and investment. |
|
The slope of the U.S. aggregate demand curve is based partly on the conclusion that as the price level rises, |
c. people feel less wealthy. |
|
The change in the quantity of goods and services demanded in the U.S. is based on the logic that as the price level |
a. real wealth falls, interest rates rise, and the dollar appreciates. |
|
The change in the aggregate quantity of goods and services demanded in the U.S. is based on the logic that as the |
b. real wealth rises, interest rates fall, and the dollar depreciates. |
|
Changes in the price level affect which components of aggregate demand? |
d. consumption, investment, and net exports |
|
Which of the following does not help explain the direction the quantity of aggregate goods demanded changes |
d. the dollar appreciates relative to other currencies |
|
Suppose a stock market boom makes people feel wealthier. The increase in wealth would cause people to desire |
a. increased consumption, which shifts the aggregate demand curve right. |
|
Suppose a fall in stock prices makes people feel poorer. The decrease in wealth would induce people to |
c. decrease consumption, shifting the aggregate demand curve to the left. |
|
Suppose a stock market crash makes people feel poorer. This decrease in wealth would induce people to |
b. decrease consumption, which shifts aggregate demand left. |
|
From 2001 to 2005 there was a dramatic rise in the price of houses. If this made people feel wealthier, then it |
a. aggregate demand right |
|
The Central Bank of Libertina increases the money supply at the same time the Parliament of Libertina passes a |
a. and the investment tax credit each cause aggregate demand to shift right. |
|
The initial impact of an increase in an investment tax credit is to shift |
a. aggregate demand right. |
|
The initial impact of the repeal of an investment tax credit is to shift |
b. aggregate demand left. |
|
Other things the same, an increase in the amount of capital firms wish to purchase would initially shift |
a. aggregate demand right. |
|
If businesses in general decide that they have overbuilt and so now have too much capital, their response to this |
a. aggregate demand right. |
|
Imagine that businesses in general believe that the economy is likely to head into recession and so they reduce |
b. aggregate demand left. |
|
When taxes decrease, consumption |
b. increases, shifting aggregate demand to the right. |
|
When taxes increase, consumption |
b. decreases as shown by shifting aggregate demand to the left. |
|
When taxes decrease, consumption |
a. increases, so aggregate demand shifts right. |
|
Consumption would decrease and aggregate demand would shift |
c. left if taxes increased. |
|
When the money supply increases |
a. interest rates fall and so aggregate demand shifts right. |
|
When the money supply decreases |
d. interest rates rise and so aggregate demand shifts left. |
|
An increase in the money supply |
a. and the investment tax credit both cause aggregate demand to shift right. |
|
Which of the following shifts aggregate demand to the right? |
d. All of the above are correct. |
|
Which of the following shifts aggregate demand to the right? |
b. increases in the profitability of capital due perhaps to technological progress. |
|
Which of the following shifts aggregate demand to the left? |
b. a decrease in the money supply |
|
Which of the following shifts aggregate demand to the right? |
b. The Fed buys bonds in the open market. |
|
Which of the following shifts aggregate demand to the left? |
d. Stock prices fall for some reason other than a change in the price level. |
|
Other things the same, when the government spends more, the initial effect is that |
a. aggregate demand shifts right |
|
Aggregate demand shifts left when the government |
b. cuts military expenditures. |
|
Aggregate demand shifts right when the government |
b. increases the money supply. |
|
Aggregate demand would shift right if either |
c. government expenditures or the money supply increased. |
|
Aggregate demand shifts right if |
a. net exports rise or the money supply rises. |
|
Aggregate demand shifts right if |
c. taxes fall or stock prices rise. |
|
If countries that imported goods and services from the United States went into recession, we would expect that U.S. |
d. fall, making aggregate demand shift left. |
|
If people want to save more for retirement |
b. or if the government raises taxes, aggregate demand shifts left. |
|
At the end of World War II many European countries were rebuilding and so were eager to buy capital goods and |
a. both the United States and Europe. |
|
If the dollar appreciates, perhaps because of speculation or government policy, then U.S. net exports |
d. decrease which shifts aggregate demand left. |
|
If the dollar appreciates because of speculation or government policy |
b. or if other countries experience recessions, aggregate demand shifts left in the United States. |
|
An increase in which of the following, other things the same, shifts aggregate demand to the right? |
d. All of the above are correct |
|
If speculators lost confidence in foreign economies and so wanted to buy more U.S. bonds |
b. the dollar would appreciate which would cause aggregate demand to shift left. |
|
If speculators gained greater confidence so that they wanted to buy more assets of foreign countries and fewer U.S. |
c. the dollar would depreciate which would cause aggregate demand to shift right. |
|
Political Instability Abroad |
a. It would appreciate in foreign exchange markets making U.S goods more expensive compared to foreign goods. |
|
Political Instability Abroad |
c. Net exports would fall and so U.S. aggregate demand would fall. |
|
The aggregate supply curve is upward sloping rather than vertical in |
c. the long run, but not the short run. |
|
The aggregate supply curve is upward sloping in |
d. the short run, but not the long run. |
|
Imagine two economies that are identical except that for a long time, economy A has had a money supply of $500 |
c. the price level, but not real GDP is higher in country B. |
|
Imagine two economies that are identical except that for a long time, economy A has had a money supply of |
c. the price level, but not real GDP is lower in country B. |
|
Which of the following is not a determinant of the long-run level of real GDP? |
a. the price level |
|
The long-run aggregate supply curve |
d. All of the above are correct. |
|
Which of the following is correct? |
b. The long-run, but not the short-run, aggregate supply curve is consistent with the idea that nominal variables do |
|
The position of the long-run aggregate supply curve |
a. is determined by the things that determine output in the classical model. |
|
The long-run aggregate supply curve shows that by itself a permanent change in aggregate demand would lead to a |
b. in the price level, but not real GDP. |
|
The long-run aggregate supply curve would shift right if immigration from abroad |
c. increased or Congress abolished the minimum wage. |
|
The long-run aggregate supply curve shifts right if |
d. All of the above are correct. |
|
The long-run aggregate supply curve shifts left if |
b. there is a hurricane. |
|
Which of the following shifts long-run aggregate supply right? |
a. an increase in either the physical or human capital stock |
|
Which of the following would shift the long-run aggregate supply curve to the right? |
c. increased international trade |
|
The long-run aggregate supply curve would shift right if the government were to |
d. None of the above is correct. |
|
Which of the following shifts the long-run aggregate supply curve to the left? |
c. an increase in the price of imported natural resources, but not opening up international trade |
|
Some countries have high minimum wages and require a lengthy and costly process to get permission to open a business |
b. Reducing the minimum wage and the time and cost to open a business would both shift the long-run aggregate supply curve to the right. |
|
The long-run aggregate supply curve shifts right if |
a. technology improves. |
|
Which of the following would shift long-run aggregate supply to the right? |
d. All of the above are correct. |
|
A candidate for political office announces the following policies which, he says, economics clearly demonstrates |
d. 1 shifts long-run aggregate supply left, 2 shifts long-run aggregate supply right. |
|
In the long run, technological progress |
d. makes the price level fall, while increases in the money supply make prices rise. |
|
Other things the same, if the long-run aggregate supply curve shifts right, prices |
d. decrease and output increases. |
|
Other things the same, if the long-run aggregate supply curve shifts left, prices |
c. increase and output decreases. |
|
According to the aggregate demand and aggregate supply model, in the long run an increase in the money supply |
c. an increase in the price level but does not change real GDP. |
|
Over the last fifty years both real GDP and prices have trended upward in most countries. Continuing real GDP |
c. continued technological progress and continuing increases in the money supply. |
|
Since the end of World War II, the U.S. has almost always had rising prices and an upward trend in real GDP. To |
c. both aggregate demand and long-run aggregate supply must be shifting right and aggregate demand must shift farther. |
|
Which of the following, other things the same, would make the price level decrease and real GDP increase? |
a. long-run aggregate supply shifts right |
|
Wages tend to be sticky |
a. because of contracts, social norms, and notions of fairness. |
|
The sticky-wage theory of the short-run aggregate supply curve says that when the price level rises more than |
a. production is more profitable and employment rises. |
|
The sticky-wage theory of the short-run aggregate supply curve says that when the price level is lower than |
d. production is less profitable and employment falls |
|
Other things the same, if workers and firms expected prices to rise by 2 percent but instead they rise by 3 percent, |
a. employment and production rise. |
|
Other things the same, if prices fell when firms and workers were expecting them to rise, then |
d. employment and production would fall. |
|
According to the sticky-wage theory of the short-run aggregate supply curve, if workers and firms expected prices |
d. employment and production fall |
|
The sticky-wage theory of the short-run aggregate supply curve says that the quantity of output firms supply will |
a. the price level is higher than expected making production more profitable. |
|
If there are sticky wages, and the price level is greater than what was expected, then |
d. the quantity of aggregate goods and services supplied rises, as shown by a movement to the right along the short-run aggregate supply curve. |
|
The sticky-price theory of the short-run aggregate supply curve says that when the price level is higher than |
c. lower than desired prices which increases their sales. |
|
Other things the same, an unexpected fall in the price level results in some firms having |
d. higher than desired prices which depresses their sales. |
|
Other things the same, when the price level rises more than expected, some firms will have |
c. lower than desired prices which increases their sales. |
|
The sticky-price theory of the short-run aggregate supply curve says that if the price level rises by 5% and people |
c. lower than desired prices which increases their sales. |
|
Other things the same, if the price level rises by 2% and people were expecting it to rise by 5%, then some firms |
b. higher than desired prices which depresses their sales. |
|
Other things the same, if the money supply rises by 2% and people were expecting it to rise by 5%, then some |
b. higher than desired prices which depresses their sales. |
|
The misperceptions theory of the short-run aggregate supply curve says that if the price level is higher than people |
c. increased, so they increase production. |
|
Other things the same, if the price level is lower than expected, then some firms believe that the relative price of |
b. decreased, so they decrease production |
|
According to the misperceptions theory of aggregate supply, if a firm thought that inflation was going to be 5 |
a. increased, so they would increase production. |
|
According to the misperceptions theory of the short-run aggregate supply curve, if a firm thought that inflation was |
d. decreased, so they would decrease production |
|
The misperceptions theory of the short-run aggregate supply curve says that the quantity of output supplied will |
c. increases more than expected so that firms believe the relative price of their output has increased. |
|
Suppose workers notice a fall in their nominal wage but are slow to notice that the price of things they consume |
a. temporarily low and so supply a smaller quantity of labor. |
|
Other things the same, the aggregate quantity of output supplied will decrease if the price level |
b. is lower than expected so that firms believe the relative price of their output has decreased. |
|
Other things the same, the aggregate quantity of output supplied will increase if the price level |
c. is higher than expected so that firms believe the relative price of their output has increased. |
|
Of the following theories, which is consistent with a vertical long-run aggregate supply curve? |
c. both the sticky-wage and misperceptions theories. |
|
If the price level is higher than expected, firms might raise their production in the short run if |
d. All of the above are correct |
|
If the actual price level is 165, but people had been expecting it to be 160, then |
a. the quantity of output supplied rises, but only in the short run. |
|
Assuming that a is positive, theories of short-run aggregate supply are expressed mathematically as |
a. quantity of output supplied = natural rate of output + a(actual price level - expected price level). |
|
The equation: quantity of output supplied = natural rate of output + a(actual price level - expected price level), |
a. an upward-sloping, short-run aggregate supply curve. |
|
The effects of a higher than expected price level are shown by |
c. moving to the right along a given aggregate supply curve. |
|
An increase in the expected price level shifts short-run aggregate supply to the |
d. left, and an increase in the actual price level does not shift short-run aggregate supply |
|
A decrease in the expected price level would shift |
b. only the short-run aggregate supply curve right |
|
Which of the following shifts both the short-run and long-run aggregate supply right? |
c. an increase in the capital stock |
|
Which of the following shifts both short-run and long-run aggregate supply left? |
c. a decrease in the capital stock |
|
Which of the following shifts short-run, but not long-run aggregate supply right? |
b. a decrease in the expected price level |
|
Which of the following shifts short-run aggregate supply right? |
b. an increase in immigration from abroad |
|
Which of the following shifts short-run aggregate supply left? |
b. an increase in the expected price level |
|
Which of the following shifts short-run aggregate supply right? |
c. a decrease in the price of oil |
|
Which of the following would shift the short-run aggregate supply curve to the right? |
c. a decrease in the expected price level. |
|
The aggregate demand and aggregate supply model implies monetary neutrality |
b. only in the long run. |
|
In the short run Recessions in South Korea and Indonesia will cause |
b. the U.S. price level and real GDP to fall. |
|
Which of the following would cause prices and real GDP to rise in the short run? |
c. Aggregate demand shifts right. |
|
Which of the following would cause prices to fall and output to rise in the short run? |
a. Short-run aggregate supply shifts right. |
|
Which of the following would cause prices and real GDP to rise in the short run? |
b. an increase in the money supply |
|
Which of the following would cause prices to rise and real GDP to fall in the short run? |
a. an increase in the expected price level |
|
Which of the following will reduce the price level and real output in the short run? |
c. a decrease in the money supply |
|
Suppose a shift in aggregate demand creates an economic contraction. If policymakers can respond with sufficient |
c. aggregate demand right. |
|
If something caused resources to become more readily available, then |
d. the price level would fall and real GDP would rise. |
|
An economic contraction caused by a shift in aggregate demand remedies itself over time as the expected price |
c. falls, shifting aggregate supply right. |
|
An economic contraction caused by a shift in aggregate demand causes prices to |
c. fall in the short run, and fall even more in the long run. |
|
Suppose the economy is initially in long-run equilibrium and aggregate demand rises. In the long run prices |
c. are higher and output is the same as the original long-run equilibrium. |
|
The long-run effect of an increase in government spending is to raise |
d. the price level and leave real output unchanged |
|
The Stock Market Boom of 2010 |
a. aggregate demand shifts right |
|
The Stock Market Boom of 2010 |
a. both the price level and real GDP rise. |
|
The Stock Market Boom of 2010 |
c. The expected price level rises. Bargains are struck for higher wages. |
|
The Stock Market Boom of 2010 |
d. short-run aggregate supply left. |
|
The Stock Market Boom of 2010 |
c. the price level is higher and real GDP is the same. |
|
Optimism |
a. aggregate demand shifts right |
|
Optimism |
a. both the price level and real GDP rise. |
|
Optimism |
c. The expected price level rises. Bargains are struck for higher wages. |
|
Optimism |
d. short-run aggregate supply left. |
|
Optimism |
d. the price level is higher and real GDP is the same. |
|
Pessimism |
b. aggregate demand shifts left |
|
Pessimism |
b. Both the price level and real GDP fall. |
|
Pessimism |
d. The expected price level falls. Bargains are struck for lower wages. |
|
Pessimism |
c. short-run aggregate supply right. |
|
Pessimism |
d. the price level is lower and real GDP is the same. |
|
Which of the following is a lesson concerning shifts in aggregate demand? |
a. they contribute to fluctuations in output. |
|
In the early 1930s in the United States, there was a |
c. large decrease in output. In the early 1940s there was a large increase in output. |
|
Which of the following has been suggested as a cause of the Great Depression? |
d. All of the above are correct. |
|
Which of the following did not happen during the onset of the Great Depression? |
b. The Fed conducted expansionary monetary policy. |
|
In the first few years of the Great Depression, unemployment rose to about |
d. 25 percent, and prices fell about 22 percent. |
|
During World War II, |
a. government purchases of goods and services increased fivefold. |
|
During World War II, the economy's production increased about |
d. 100 percent and prices rose about 20 percent |
|
The economic boom of the early 1940s resulted mostly from |
a. increased government expenditures. |
|
The recession of 2001 appears to have been mostly the result of decreased |
b. aggregate demand due to falling stock prices and increased uncertainty. |
|
What, if anything, did policymakers do in response to the recession of 2001? |
a. tax cuts and expansionary monetary policy |
|
If there is bad weather for farming or some other temporary decrease in the availability of raw materials |
b. output falls in the short run. |
|
An increase in the price level and a reduction in real GDP could be created by |
b. natural disasters such as hurricanes and famines. |
|
An increase in the price level and a decrease in real GDP in the short run could be created by |
d. bad weather in farm states |
|
A decrease in the availability of an important major resource such as oil shifts |
b. aggregate supply left. |
|
Policymakers who control monetary and fiscal policy and want to offset the effects on output of an economic |
c. aggregate demand to the right. |
|
Stagflation exists when prices |
b. rise and output falls. |
|
Which of the following would cause stagflation? |
d. aggregate supply shifts left |
|
Which of the following will cause stagflation? |
b. an increase in oil prices |
|
When production costs rise, |
b. the short-run aggregate supply curve shifts to the left. |
|
In the short-run an increase in the costs of production makes |
c. output fall and prices rise. |
|
Which of the following shifts short-run aggregate supply left? |
a. an increase in price expectations |
|
Imagine the U.S. economy is in long-run equilibrium. Then suppose the value of the U.S. dollar increases. At the |
d. the price level will fall, and real GDP might rise, fall, or stay the same. |
|
Suppose the economy is in long-run equilibrium. If there is a sharp increase in the minimum wage as well as an |
b. real GDP will fall and the price level might rise, fall, or stay the same. |
|
Imagine the economy is in long-run equilibrium. If there is a sharp decline in the stock market combined with a |
d. the price level will fall, and real GDP might rise, fall, or stay the same |
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Suppose the economy is in long-run equilibrium. If there is a tax cut at the same time that major new sources of oil |
a. real GDP will rise and the price level might rise, fall, or stay the same. |
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Suppose the economy is in long-run equilibrium. Concerns about pollution cause the government to significantly |
c. the price level will rise, and real GDP might rise, fall, or stay the same. |
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Suppose the economy is in long-run equilibrium. Senator Aviary succeeds in getting a major new highway project |
c. the price level will rise, and real GDP might rise, fall, or stay the same. |