question

What is Gross Domestic Product (GDP)?

answer

it measures the total income of everyone in the economy

question

"When workers have a relatively small quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity by a relatively large amount." This statement

answer

is consistent with the view that capital is subject to diminishing returns.

question

GDP

answer

also measures total expenditure on the economy's output of g&s

question

Productivity is defined as the quantity of

answer

goods and services produced from each unit of labor input.

question

All else equal, which of the following would tend to cause real GDP per person to rise?

answer

an increase in investment in human capital

question

Productivity

answer

explains most of the differences in the standard of living across countries.

question

The inputs into production of goods and services that are provided by nature, such as land, rivers, and mineral deposits are called

answer

natural resources.

question

Which of the following will increase a country's real GDP per person?

answer

reducing restrictions on foreign trade and foreign investment

question

You sell fruit smoothies. One day you double the time you spend and double all your inputs, and make twice as many smoothies. Your smoothie production function has

answer

constant returns to scale.

question

Which of the following terms is used to refer to the ability of people to exercise authority over the resources they own?

answer

property rights

question

An understanding of the best ways to produce goods and services is called

answer

Technology.

question

The president of a poor country has announced that he will implement the following measures which he claims are designed to increase growth: 1. Reduce corruption in the legal system; 2. Reduce reliance on market forces because they allocate goods and services in an unfair manner; 3. Restrict investment in domestic industries by foreigners because they take some of the profits out of the country; 4. Encourage trade with neighboring countries; and 5. Increase the fraction of GDP devoted to consumption. How many of these measures will have a positive effect on growth?

answer

2

question

If an American-based firm opens and operates a new watch factory in Panama, then it is engaging in

answer

foreign direct investment.

question

The Karmic Deed Restaurant uses all of the following to produce vegetarian meals. Which of them is an example of physical capital?

answer

the tables and chairs in the restaurant

question

A country with a relatively low level of real GDP per person is considering adopting two policies to promote economic growth. The first is to increase barriers to trade. The second is to restrict foreign portfolio investment. Which of these policies would most economist think would promote growth?

answer

neither the first nor the second

question

Suppose that a new government is elected in Eurnesia. The new government takes steps toward improving the court system and reducing government corruption. The citizens of Eurnesia find these efforts credible and outsiders believe these changes will be effective and long lasting. These changes will probably

answer

raise real GDP per person and productivity in Eurnesia.

question

Human capital is the

answer

knowledge and skills that workers acquire through education, training, and experience.

question

The president of Suldinia, a developing country, proposes that his country needs to help domestic firms by reducing trade restrictions.

answer

These are outward-oriented policies and most economists believe they would have beneficial effects on growth in Suldinia.

question

Other things equal, relatively poor countries tend to grow

answer

faster than relatively rich countries; this is called the catch-up effect.

question

Human capital is

answer

knowledge and skills that workers have acquired.

question

In one day Madison Laundry washed 4,000 pounds of laundry with 5 workers who each worked 8 hours. What was its productivity?

answer

100 pounds of laundry per hour

question

Country A and country B are the same except country A currently has a lower level of capital. Assuming diminishing returns, if both countries increase their capital by 100 units and other factors that determine output are unchanged, then

answer

output in country A increases by more than in country B.

question

Which of the following can be measured by the level of real GDP per person?

answer

the standard of living but not productivy

question

Gross domestic product serves as a measure of two things

answer

the total income of everyone in the economy and the total expenditure on the nation's output of goods and services.

question

Whichh of the following is included in Germany's GDP

answer

china produced by the English owned Wedgewood Company at a factory in Berlin, Germany

question

If a U.S. citizen buys a television made in Korea by a Korean firm

answer

U.S. net exports decrease and U.S. GDP is unaffected.

question

Suppose the government eliminates all environmental regulations and, as a result, the production of goods and services increases, but there is considerably more pollution. Based on this scenario, which of the following statements is correct?

answer

GDP would definitely increase, despite the fact that GDP includes environmental quality

question

Consider two cars manufactured by Chevrolet in 2013. During 2013, Chevrolet sells one of the two cars to Sean for $24,000. Later in the same year, Sean sells the car to Kati for $19,000. The second automobile, with a market value of $30,000, is unsold at the endof 2014 and it remains in Chevrolet's inventory. The transactions just described contribute how much to GDP for 2013?

answer

$54,000

question

American company operates a fast food restaurant in Paris, France. Which of the following statements is accurate?

answer

The value of the goods and services produced by the restaurant is included in French GDP, but not in U.S. GDP

question

Which of the following is included in the investment component of GDP

answer

pending on new business equipment such as power tools but not spending on stocks and bonds

question

If the prices of all goods and services produced in the economy rose while the quantity of all goods and services stayed the same, which would rise

answer

nominal GDP but not real GDP

question

Human Development Index was proposed because

answer

of the limitations of real GDP

question

When the consumer price index rises, the typical family

answer

has to spend more dollars to maintain the same standard of living.

question

Which of the following is not a widely acknowledged problem with the CPI as a measure of the cost of living?

answer

unmeasured price change

question

Substitution bias

answer

describes a bias in economics index numbers arising from tendency to purchase inexpensive substitutes for expensive items when prices change.

question

By itself, a reduction in the price of large tractors imported into the United States from Russia

answer

leaves both the GDP deflator and the consumer price index unchanged.

question

The price of imported olives produced by a U.S. company operating in Spain increases. By itself, what effect will this price increase have on the GDP deflator and on the CPI?

answer

The GDP deflator will be unaffected and the CPI will increase.

question

In japan in 2000, nominal interest rates were 1.5 percent and the inflation rate was -0.5 percent. The real interest rate was

answer

2 %

question

the producer price index measures the cost of a basket of goods and services

answer

bought by firms.

question

an understanding of the best ways to produce goods and services is called

answer

technology.

question

country's low growth. Which of the following contributes to low growth?

answer

poorly enforced property rights

question

all else equal, if there are diminishing returns, then which of the following is true if a country increases its capital by one unit

answer

Output will rise but by less than it did when the previous unit was added

question

Suppose that an American opens and operates a recording studio in Poland. This is an example of

answer

foreign direct investment. American saving is used to finance Polish investment.

question

Suppose a country increases trade restrictions. This country would be pursing an

answer

inward policy, which most economists believe has adverse effects on the economy.

question

which of the following would tend to cause real GDP per person to rise?

answer

a change from inward-oriented policies to outward-oriented policies an increase in investment in human capital strengthening of property rights.

question

length of time until a bond matures is called the

answer

term to maturity.

question

Stock represents

answer

a claim to a share of the profits of a firm, ownership in a firm, and equity finance.

question

Megasoft wants to finance the purchase of new equipment for developing security software called Doors, but they have limited internal funds. Megasoft will likely

answer

demand loanable funds by selling bonds.

question

Municipal bonds pay a relatively

answer

low rate of interest because of their low-default risk and because the interest they pay is not subject to federal income tax

question

Other things the same, which bond would you expect to pay the highest interest rate?

answer

a bond issued by a new restaurant chain

question

The sale of stocks

answer

to raise money is called equity finance

question

The sale of bonds

answer

to raise funds is called debt finance

question

Compared to bondholders, stockholders

answer

face higher risk and have the potential for higher returns

question

During a financial crisis the possibility of bank failures rose. An increase in the likelihood of a bank failing shifts demand for its stock

answer

left, so the price falls.

question

Stock indexes are

answer

The average of a group of stock prices

question

In a closed economy, national saving is

answer

equal to investment.

question

If Congress reduced the tax rate on interest income, investment

answer

and saving would increase.

question

If the government instituted an investment tax credit, then which of the following would be higher in equilibrium?

answer

saving and the interest rate

question

A budget surplus

answer

reduces the interest rate and raises investment

question

Mixster Concrete Company is considering buying a new cement truck. The owners and their accountants decide that this is the profitable thing to do. Before they can buy the truck, the interest rate and price of trucks change. In which case do these changes both make them less likely to buy the truck

answer

both interest rates and price of trucks rise

question

When you rent a car, you might treat it with less care than you would if it were y our own. This is an example of

answer

moral hazard.

question

Samantha holds stocks in four companies. If she adds stocks of several more companies she will decrease

answer

firm specific risk but not market risk

question

According to the efficient markets hypothesis, better than expected news about a corporation will

answer

raise the price of the stock.

question

The efficient markets hypothesis implies

answer

that all stocks are fairly valued all the time and that no stock is a better buy than any other.

question

The efficient markets hypothesis says that beating the market consistently is

answer

impossible. Many studies find that beating the market is, at best, extremely difficult

question

An index fund

answer

holds all the stocks in a given stock index.

question

If the efficient market hypothesis is correct, then

answer

index funds should typically beat managed funds, and usually do.

question

Ted is working part time. Alice is on temporary layoff. Who is counted as employed by the BLS?

answer

Ted

question

Sam just lost his job, but isn't yet looking for a new one. Sam is

answer

not counted as unemployed or counted as part of the labor force.

question

The labor-force participation rate measures the percentage of the

answer

total adult population that is in the labor force

question

Frictional unemployment can be the consequence of

answer

. workers leaving existing jobs to find ones they like better. . an industry declining while another is growing. . changes in the working conditions offered by competing firms

question

Other things the same, an increase in wages above their equilibrium level

answer

increases structural unemployment and increases the natural rate of unemployment.

question

Unions

answer

cause wages of nonunionized workers to fall.

question

Which of the following best illustrates diversification?

answer

Instead of holding only the stocks of companies engaged in the banking business, a person decides to hold stock in a number of different companies producing different goods and services

question

If stock prices follow a random walk, it means

answer

stock prices are just as likely to rise as to fall at any given time.

question

Mario was laid off two months ago. He has not searched for other work because he is expecting to be recalled to work. In the U.S. labor force statistics Mario is counted as

answer

unemployed and in the labor force.

question

The BLS counts discouraged workers as

answer

out of the labor force. If the were counted as unemployed the unemployment r ate would be higher.

question

Which of the following is an explanation for the existence of frictional unemployment?

answer

job search

question

Which of the following is a function of money?

answer

a unit of account a store of value medium of exchange

question

Which of the following executes open-market operations

answer

New York Federal Reserve Bank

question

Fed's primary tool to change the money supply is

answer

conducting open market operations.

question

When the Fed decreases the discount rate, banks will

answer

borrow more from the Fed and lend more to the public. The money supply increases.

question

Suppose that banks desire to hold no excess reserves the reserve ratio is 5 percent and a bank receives a new deposit of $1,000. This bank

answer

. will increase its required reserves by $50. . will initially see its total reserves increase by $1,000. will be able to make a new loan of $950.

question

When conducting an open-market purchase, the Fed

answer

buys government bonds, and in so doing increases the money supply.

question

Which h of the following is correct

answer

A bank's deposits at the Federal Reserves counts as part of the bank's reserves.The Federal Reserve pays interest on these deposits.

question

The federal funds rate is the interest rate that

answer

banks charge one another for loans.

question

When the price level falls, the number of dollars needed to buy a representative basket of goods

answer

decreases, so the value of money rises.

question

Money demand refers to

answer

how much wealth people want to hold in liquid form.

question

According to the classical dichotomy, which of the following is influenced by monetary factors

answer

nominal interest rates

question

The evidence from hyperinflations indicates that money growth and inflation

answer

moved together, which is consistent with quantity theory.

question

Surplus equal

answer

Exports - Imports

question

A firm in China sells jackets to a U.S. department store chain. Other things the same, these sales

answer

decreases U.S. net exports and increase Chinese net exports.

question

You buy a new car built in Sweden. Other things the same, your purchase by itself

answer

raises U.S. imports and lowers U.S. net exports.

question

U.S. firm opens a factory that produces camping equipment in Estonia

answer

This increases U.S. net capital outflow and decreases Estonian net cap ital outflow.

question

U.S. pharmacy buys drugs from a British company and pays for them with US dollars. This transaction

answer

increases British net exports, and decreases U.S. capital outflow.

question

a country has negative net capital outflows, then its net exports are

answer

negative and its saving is smaller than its domestic investment.

question

if a country has a trade deficit

answer

it has negative net exports and negative net capital outflow.

question

if there is a trade deficit, then

answer

saving is less than domestic investment and Y < C + I + G

question

if Argentina's domestic investment exceeds national saving, then Argentina has

answer

negative net capital outflows and negative net exports.

question

If the dollar appreciated relative to the British pound then, other things the same

answer

the dollar would buy more pounds. The appreciation would encourage you to buy more British goods and services.

question

depreciation of the U.S. real exchange rate induces U.S. consumers to buy

answer

more domestic goods and fewer foreign goods

question

short period of falling incomes and rising unemployment is called a

answer

recession

question

2001, the United States was in recession. Which of the following things would you expect not to have happened?

answer

increased investment spending

question

During a recession what would you expect?

answer

. increased layoffs and firings . a higher rate of bankruptcy . increased claims for unemployment insurance

question

Most economists believe that after a few years, changes in the money supply change

answer

only nominal variables, but not real variables.

question

The effect of an increase in the price level on aggregate demand is represented by a

answer

movement to the left along a given aggregate demand curve.

question

The wealth effect, interest rate effect, and exchange rate effect are all explanations for

answer

the slope of the aggregate demand curve

question

Other things the same, as the price level rises, exchange rates

answer

exports decrease, while imports increase.

question

Suppose a stock market boom makes people feel wealthier. The increase in wealth would cause people to desire

answer

increased consumption, which shifts the aggregate demand curve right.

question

The initial impact of an increase in an investment tax credit is to shift

answer

aggregate demand right.

question

Other things the same, when the government spends more, the initial effect is t hat

answer

aggregate demand shifts right

question

If countries that imported goods and services from the United States went into recession, we would expect that U.S. net exports would

answer

fall, making aggregate demand shift left.

question

The long-run aggregate supply curve

answer

is vertical. is a graphical representation of the classical dichotomy. indicates monetary neutrality in the long run.

question

The long-run aggregate supply curve shifts right if

answer

. immigration from abroad increases. . the capital stock increases. . technology advances

question

Suppose a shift in aggregate demand creates an economic contraction. If policymakers can respond with sufficient speed and precision, they can offset the initial shift by shifting

answer

aggregate demand right.

question

there is bad weather for farming or some other temporary decrease in the availability of raw materials

answer

output falls in the short run.

question

If taxes increase

answer

consumption decreases, aggregate demand shifts left.

question

If taxes decrease

answer

consumption increases, aggregate demand shifts right.

question

Gross Domestic Product (GDP) Is

answer

the market value of all final goods & services produced within a country in a given period of time.

question

Four components of GDP

answer

Consumption (C), Investment (I), Government, Purchases (G), Net Exports (NX)

question

Which broker, if any, gave her incorrect advice?

answer

Broker C: "Stocks with greater risks offer lower average returns."

question

Lucky Hardware Store considered building a store in a new location. The owners and their accountants decided that this was not the profitable thing to do. However, soon after they made this decision, both the interest rate and the cost of building the store changed. In which case do these changes both make it more likely that they will now build the store?

answer

Interest rates fall and the cost of building the store falls.

question

David increases the number of companies in which he holds stocks.

answer

This reduces risk's standard deviation and firm-specific risk

question

Abby buys health insurance because she knows that she has health risks that wouldn't be obvious to an insurance company. Brad buys home owners insurance and then is less careful to make sure he's put out his cigarettes. The example with Abby

answer

illustrates adverse selection; the example with Brad illustrates moral hazard.

question

Other things the same, when the interest rate rises, the present value of future revenues from investment projects

answer

falls, so investment spending falls.

question

Which of the following actions best illustrates moral hazard?

answer

A person purchases homeowners insurance and then checks his smoke detector batteries less frequently.

question

The problem of moral hazard arises because

answer

after people buy insurance, they have less incentive to be careful about their risky behavior.

question

Which of the following is the correct way to compute the future value of $100 put into an account that earns 4 percent interest for 10 years?

answer

$100(1 + .04)^10

question

If you are convinced that stock prices are impossible to predict from available information, then you probably also believe that

answer

the stock market is informationally efficient.

question

If Robert is risk-averse, then he will always

answer

choose not to play a game where he has a 50 percent chance of winning $1 and a 50 percent chance of losing $1

question

Tami knows that people in her family die young, and so she buys life insurance. Preston knows he is a reckless driver and so he applies for automobile insurance.

answer

These are both examples of adverse selection.

question

According to the efficient markets hypothesis, worse-than-expected news about a corporation will

answer

lower the price of the stock

question

Whenever the price of an asset rises above what appears to be its fundamental value, the market is said to be experiencing a

answer

speculative bubble.

question

Which of the following is correct?

answer

Index funds typically have a higher rate of return than managed funds. This tends to support the efficient market hypothesis.

question

People who hold well-diversified portfolios of stocks have greatly reduced or eliminated

answer

firm-specific risk, but still they have reason to worry about their wealth decreasing as a result of recessions.

question

Ben decided to increase the number of stocks in his portfolio. In doing so, Ben reduced

answer

the firm-specific risk, but not the market risk of his portfolio.

question

Consider the following two situations. Nicole accepts a job where she will be driving in dangerous traffic, so she seeks auto insurance. After Braden buys health insurance, he visits the gym less frequently. Which of these person's actions illustrates moral hazard?

answer

Braden's but not Nicole's

question

In the 1990s, Fed Chairperson Alan Greenspan questioned whether the stock market

answer

boom at that time reflected "irrational exuberance."

question

People who are unemployed because of job search are best classified as

answer

frictionally unemployed.

question

Consumers decide to ride bikes more and drive cars less. Bicycle companies expand production while automobile companies fire workers. This is an example of

answer

frictional unemployment created by sectoral shifts

question

Who of the following is counted as unemployed by the BLS?

answer

someone on temporary layoff

question

In the U.S., people are required to pay taxes on

answer

nominal interest earnings, irrespective of their real interest earnings.

question

The velocity of money is

answer

the average number of times per year a dollar is spent.

question

According to the classical dichotomy, when the money supply doubles, which of the following also doubles?

answer

the price level and nominal wages

question

Interest rates adjusted for the effects of inflation

answer

are real variables; inflation is a nominal variable.

question

The classical dichotomy refers to the idea that the supply of money

answer

determines nominal variables, but not real variables.

question

Wealth is redistributed from debtors to creditors when inflation was expected to be

answer

high and it turns out to be low.

question

The supply of money increases when

answer

the Fed makes open-market purchases.

question

Suppose the price level rises, but the number of dollars you are paid per hour stays the same. This means that your

answer

real wage is lower.

question

The principle of monetary neutrality implies that an increase in the money supply will

answer

increase the price level, but not real GDP.

question

As the price level rises, the value of money

answer

decreases, so people want to hold more of it.

question

The supply of money is determined by

answer

the Federal Reserve System

question

ur boss gives you an increase in the number of dollars you earn per hour. This increase in pay makes

answer

your nominal wage increase. If your nominal wage rose by a greater percentage than the price level, then your real wage also increased.

question

The price of a Honda Accord

answer

is a nominal variable and the price of a Honda Accord divided by the price of a Honda Civic is a real variable

question

Most economists believe the principle of monetary neutrality is

answer

mostly relevant to the long run

question

The Fisher effect says that

answer

the nominal interest rate adjusts one for one with the inflation rate.

question

The source of hyperinflations is primarily

answer

ncreases in money-supply growth.

question

When the money market is drawn with the value of money on the vertical axis, the money demand curve slopes

answer

downward, because at higher prices people want to hold more money.

question

According to the assumptions of the quantity theory of money, if the money supply increases 5 percent, then

answer

the price level would rise by 5 percent and real GDP would be unchanged.

question

The term hyperinflation refers to

answer

a period of very high inflation.

question

The price level is a

answer

nominal variable.

question

When the money market is drawn with the value of money on the vertical axis, an increase in the money supply shifts the money supply curve to the

answer

right, raising the price level.

question

The value of money falls as the price level

answer

rises, because the number of dollars needed to buy a representative basket of goods rises

question

Ava owns her own business. The Bureau of Labor Statistics counts Ava as

answer

employed and in the labor force.

question

Matt is waiting to be recalled to a job from which he was laid off. David was fired but hasn't looked for work during the last two months. Who does the BLS count as unemployed?

answer

Matt but not David

question

Which of the following does not create unemployment by keeping wages above the equilibrium level?

answer

job search

question

If the natural rate of unemployment is 5.2 percent and the actual rate of unemployment is 5.7 percent, then by definition there is

answer

cyclical unemployment amounting to 0.5 percent of the labor force.

question

Cyclical Unemployment equals

answer

Actual rate of unemployment - natural rate of unemployment

question

If the minimum wage were currently above the equilibrium wage, then a decrease in the minimum wage that kept it above the equilibrium wage would

answer

reduce the surplus of labor.

question

The BLS classifies people who would like to work but have given up looking for a job as

answer

out of the labor force. If they were classified as unemployed, the reported unemployment rate would be larger.

question

Over the past several decades in the United States, the labor-force participation rate of women has

answer

increased and the labor-force participation rate of men has decreased.

question

Which of the following is correct about unions?

answer

There is no consensus among economists about whether unions are good or bad for the economy.

question

A typical American worker covered by unemployment insurance receives

answer

50 percent of his former wages for 26 weeks.

question

Satchel loses his job and immediately begins looking for another. Other things the same, the unemployment rate

answer

increases and the labor-force participation rate is unaffected.

question

Jill does not currently have a job, but has applied for several jobs in the previous week. Ken is an unpaid stay-at-home dad who has not searched for work in recent years. Who does the BLS count as out of the labor force?

answer

Ken but not Jill

question

Unemployment insurance

answer

reduces search effort which raises unemployment.

question

The theory of efficiency wages explains why

answer

it may be in the best interest of firms to offer wages that are above the equilibrium level.

question

Mary worked part-time for her mother's business without pay. Larry was absent from work because he had the flu. Who is counted as employed by the BLS?

answer

both Marry and Larry

question

Suppose that consumers choose to smoke less and chew gum more. Tobacco companies cut back on the number of people they employ while chewing gum manufacturers employ more. This is an example of

answer

frictional unemployment created by sectoral shifts.

question

If the wage is kept above the equilibrium wage for any reason, the result is

answer

structural unemployment.

question

Policies that reduce the time it takes unemployed workers to find new jobs

answer

can reduce both frictional unemployment and the natural rate of unemployment.

question

Unemployment that results because the number of jobs available in some labor markets may be insufficient to give a job to everyone who wants one is called

answer

structural unemployment.

question

Policymakers who control monetary and fiscal policy and want to offset the effects on output of an economic contraction caused by a shift in aggregate supply could use policy to shift

answer

aggregate demand to the right.

question

When taxes increase, consumption

answer

decreases as shown by a shift of the aggregate demand curve to the left.

question

When the money supply decreases

answer

interest rates rise and so aggregate demand shifts left.

question

The effect of an increase in the price level on the aggregate-demand curve is represented by a

answer

movement to the left along a given aggregate-demand curve.

question

The initial impact of the repeal of an investment tax credit is to shift

answer

aggregate demand left.

question

Financial Crisis Suppose that banks are less able to raise funds and so lend less. Consequently, because people and households are less able to borrow, they spend less at any given price level than they would otherwise. The crisis is persistent so lending should remain depressed for some time. Refer to Financial Crisis. What happens to the price level and real GDP in the short run?

answer

both the price level and real GDP fall

question

In the short-run an increase in the costs of production makes

answer

output fall and prices rise.

question

In the context of the aggregate-demand curve, the interest-rate effect refers to the idea that, when the price level increases,

answer

households increase their holdings of money; in turn, interest rates increase, which reduces spending on investment goods.

question

In 2009 Congress passed legislation providing states with funds to build roads and bridges. It also instituted tax cuts. Which of these shifts aggregate demand right?

answer

both the increased funding for states and the tax cuts

question

An economic contraction caused by a shift in aggregate demand causes prices to

answer

fall in the short run, and fall even more in the long run.

question

During a recession the economy experiences

answer

falling employment and income.

question

A decrease in the expected price level shifts short-run aggregate supply to the

answer

right, and an increase in the actual price level does not shift short-run aggregate supply.

question

If aggregate demand shifts left, then in the short run

answer

the price and real GDP both fall.

question

In the context of the aggregate-demand curve, the exchange-rate effect refers to the idea that, other things the same, an increase in the price level causes the interest rate to

answer

increase, the dollar to appreciate, and net exports to decrease.

question

Which of the following would cause stagflation?

answer

aggregate supply shifts left

question

In the context of aggregate demand and aggregate supply, the wealth effect refers to the idea that, when the price level decreases, the real wealth of households

answer

increases and as a result consumption spending increases. This effect contributes to the downward slope of the aggregate-demand curve.

question

Aggregate demand shifts left when the government

answer

cuts military expenditures.

question

Suppose a fall in stock prices makes people feel poorer. The decrease in wealth would induce people to

answer

decrease consumption, shown by shifting the aggregate-demand curve to the left.

question

Which of the following shifts short-run aggregate supply right?

answer

a decrease in the price of oil

question

In 2001, the United States was in recession. Which of the following things would you not expect to have happened?

answer

increased investment spending

question

According to the aggregate demand and aggregate supply model, in the long run an increase in the money supply leads to

answer

an increase in the price level but does not change real GDP.

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