The open economy effect refers to the fact that A) the position and shape of the long run aggregate supply curve is partially due to the fact that we import goods. B) the slope of the aggregate demand curve is partially explained by the reduction in the desire to buy fewer U.S. goods by U.S. […]
Date: September 2nd, 2020
Which of the following is likely to cause the demand curve for cars to shift to the left? A) A rise in the price of gasoline B) A rise in the price of cars C) An increase in the economy’s national income D) An increase in the cost of production leading to an increase in […]
Date: September 2nd, 2020
Refer to the above figure. If real disposable income is less than $5,000, then saving is A) negative. B) 0. C) positive. D) none of the above: cannot be determined with the given information. ANSWER A
Date: September 2nd, 2020
Long-run aggregate supply curve in the classical model A) is a downward sloping line. B) is the level of real GDP corresponding to 100 percent labor force participation. C) is the level of real GDP corresponding to the natural rate of unemployment. D) is determined by the capital stock of the economy, not the labor […]
Date: September 2nd, 2020
The government might engage in expansionary fiscal policy if it wanted to A) shift the aggregate demand curve to the left. B) reduce the level of unemployment. C) reduce real GDP. D) reduce the price level. ANSWER B
Date: September 2nd, 2020
The development of new products through research and development in new growth theory is important because A) new patents are created. B) there can be a positive impact on future growth. C) society’s scarce resources are being used when they could be used for current consumption. D) it will lead to a reduction in the […]
Date: September 2nd, 2020
Patents stimulate technological advance by A) allowing inventors to capture the economic rewards of their inventions. B) making capital more productive. C) providing information about the status of technical knowledge in the economy. D) enabling the government to determine which potential technological advances firms should pursue. ANSWER A
Date: September 2nd, 2020
Which of the following pairs of goods is likely to be considered complements? A) Nokia and Samsung cell phones B) Laptops and electric heaters C) Motorcycles and typewriters D) Pens and writing pads ANSWER D
Date: September 2nd, 2020
According to the classical model, investment A) is a function of the nominal GDP. B) is inversely related to the interest rate. C) is a function of real GDP. D) is influenced by the money illusion at low income levels. ANSWER B
Date: September 2nd, 2020
The interest rate effect is part of the reason A) the long-run aggregate supply curve is vertical. B) the aggregate demand curve is downward sloping. C) the short-run aggregate supply curve is upward sloping. D) the aggregate demand curve is upward sloping. ANSWER B
Date: September 2nd, 2020
