Demand-side inflation occurs when A) long-run aggregate demand rises faster than short-run aggregate supply. B) aggregate demand falls more rapidly than aggregate supply. C) increases in aggregate supply outstrip increases in aggregate demand. D) increases in aggregate demand are not matched by increases in aggregate supply. ANSWER D
[et_pb_section admin_label=”section”] [et_pb_row admin_label=”row”] [et_pb_column type=”4_4″][et_pb_text admin_label=”Text”]________ will lead to an increase in the gross domestic product of a country, all other variables remaining constant. A) An increase in exports B) An increase in imports C) A fall in the expenditure incurred by the government D) A fall in the expenditure on investment goods […]
If the net public debt remains unchanged during a given period, but the gross public debt increases, then which of the following statements must be correct? A) Government interagency borrowing must have decreased during the period. B) Foreign ownership of U.S. Treasury securities must have fallen during the period. C) Government interagency borrowing must have […]
What is meant by the term “rate of interest”? If the nominal rate of interest in an economy is 6%, and the rate of inflation in the economy is 4%, what is the real rate of interest in the economy? What will be an ideal response? ANSWER The rate of interest is the additional […]
Assuming that Yd = $20,000 and C = $22,000, we would find that the average propensity to consume would be equal to A) 0.8. B) 1.8. C) 1.1. D) 0.9. ANSWER C
Refer to the scenario above. If both economies have the same depreciation rate, then which of the following statements will be true? A) Economy A will have a greater capital stock and a lower GDP than economy B. B) Economy A will have a greater capital stock and GDP than economy B. C) Economy A […]
Resources are all of the following EXCEPT A) scarce and therefore require choices to be made. B) limited in quantity and can be used in different ways. C) unlimited and in abundance. D) the things we use to produce goods and services. ANSWER C
The physical and mental effort people use to produce goods and services is a description of which factor of production? A) physical capital B) labor C) entrepreneurship D) human capital ANSWER B
Which of the following will lead to an increase in the gross domestic product of a country, all other variables remaining unchanged? A) An increase in imports B) An increase in consumption expenditure C) A fall in the expenditure incurred by the government D) A fall in the expenditure on investment goods ANSWER B
If a country increases its savings rate, the steady-state equilibrium level of: A) GDP will increase. B) investment will decrease. C) capital stock will decrease. D) efficiency units of labor will increase. Consider two economies: A and B. Both the countries have access to the same aggregate production function and have the same population and […]
