Test Solution Manual for Macroeconomics Chapter 24 Rated A+
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Macroeconomics
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Macroeconomics
Test Solution Manual for Macroeconomics Chapter 24 Rated A+
If the price level of what firms produce is rising across an economy, but the costs of production are constant, then: - Answers higher profits will induce expanded production.
Melanie decided to save 20% of her annual earnings for 10 yea...
Test Solution Manual for Macroeconomics Chapter 24 Rated A+
If the price level of what firms produce is rising across an economy, but the costs of production are
constant, then: - Answers higher profits will induce expanded production.
Melanie decided to save 20% of her annual earnings for 10 years so she would have a down payment for
a house. After 5 years, what change in the economy would cause an increase in the purchasing power of
the funds she has managed to save? - Answers deflation
When the economy of a country is operating close to its full capacity: - Answers cyclical unemployment
is close to zero.
Changes in the price level of the different components of aggregate demand are reflected in the
AD/ASAD/AS macroeconomic model by a ________________________. - Answers downward sloping AD
curve
As the aggregate price level in an economy rises, ____________________. - Answers interest rates
increase
What is the equilibrium output? - Answers Occurs when the aggregate demand and supply are equal at
the same price level
Aggregate supply curves are ________________________ for low levels of output, and
____________________________ for high levels of output. - Answers relatively flat; relatively steep
In an AD/ASAD/AS diagram, __________________________ could explain a rise in cyclical
unemployment? - Answers a shift to the left in either AS or AD
When an economy's output increases and the price level decreases, the _________ curve has shifted to
the ____________. - Answers AS; right
The graph refers to a significant increase in individual income taxes, taking them to their highest level in
50 years. Which of the following is likely to result? - Answers the economy will experience lower
economic growth
Potential GDP in the U.S. will be unaffected by ____________________. - Answers the unemployment
rate
Which of the following will have the greatest influence on the slope of the demand curve in a single
market model? - Answers substitute goods
Whether the economy is in a recession is illustrated in the AD/AS model by how close the
_____________________ is to the potential GDP line. - Answers equilibrium
The graph reflects a significant increase in world oil prices. What will the impact on aggregate supply
most likely lead to? - Answers an increase in input prices
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