The long-run aggregate supply curve will shift to the right if
A) the economy experiences technological change.
B) there is a decrease in population.
C) the economy experiences high levels of inflation.
D) net exports decrease.
If, between 2003 and 2013, the economy’s real GDP grew from $20 billion to $40
billion, what was the average annual growth rate in the economy?
A) 3%
B) 7%
C) 20%
D) 100%
The curve showing the short-run relationship between the ________ and the ________
is called the Phillips curve.
A) nominal interest rate; real interest rate
B) unemployment rate; inflation rate
C) price level; real GDP
D) exchange rate; real interest rate
The passage of the Smoot-Hawley Tariff in 1930 sparked a trade war that caused net
exports to ________ and real GDP to ________.
A) increase; increase
B) decrease; increase
C) increase; decrease
D) decrease; decrease
________ usually increase(s) when the U.S. economy is in a recession and decrease(s)
when the U.S. economy is expanding.
A) Consumer spending
B) Planned investment
C) Net Exports
D) Unplanned investment
The tax multiplier
A) is negative.
B) is larger in absolute value as compared to the government spending multiplier.
C) is a measure of how much taxes will fall when income is falling.
D) is always less than one.
According to the Australian Wool Innovation, severe drought conditions in Australia
contributed to the lowest level of wool production in 50 years. This record low
production has driven up prices sharply in Australian wool markets. Meanwhile, the
price of raw cotton increased significantly for the first time in many years.
a. Illustrate this observation with one demand and supply graph for the market for
Australian wool and another demand and supply graph for raw cotton.
b. Make sure that your graphs clearly show (1) the initial equilibrium before the
decrease in the supply of Australian wool and (2) the final equilibrium.
c. Use arrows to indicate any shifts in the demand and supply curves for each market.
d. Label your graphs fully and write an explanation of your work.
Which of the following is most important in explaining exchange rate fluctuations in
the short run?
A) relative price levels across countries
B) preferences for domestic and foreign goods
C) interest rates
D) relative rates of productivity growth across countries
An increase in the demand for American-made goods will
A) increase the supply of dollars on the foreign exchange market.
B) decrease the supply of dollars on the foreign exchange market.
C) increase the demand for dollars on the foreign exchange market.
D) decrease the demand for dollars on the foreign exchange market.
The Industrial Revolution began in
A) England around 1750.
B) the United States around 1820.
C) France around 1680.
D) Germany around 1780.