Quiz 4 - econ omy' An equilibrium level of real GDP is one...

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Quiz 4 Suppose government spending is cut. Other things being equal, the aggregate demand for national production will (a) fall. (b) rem ain cons tant. (c) rise. (d) All of the abov e.
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If aggregate demand shifts from AD 2 to AD 1 ,
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(a) real GDP will incre ase, but the price level will decr ease . (b) real GDP will decr ease , but the price level will incre ase. (c) real GDP , price s, and empl oym ent will decr ease . (d) real GDP , price s,
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Other things being equal, an increase in input prices will
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(a) shift the aggr egat e supp ly curv e inwa rd and redu ce pote ntial real GDP . (b) shift the aggr egat e supp ly curv e inwa rd with out redu cing pote ntial real GDP or the level of real GDP corr espo ndin g to the
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Unformatted text preview: econ omy' An equilibrium level of real GDP is one for which (a) aggr egat e purc hase s equ al cons ump tion. (b) aggr egat e qua ntity dem and ed equ als aggr egat e qua ntity supp lied. (c) cons ump tion equ als disp osab le inco me. (d) Non e of the abov e. Keynes believed that a stimulation of aggregate spending levels would induce an economy to grow out of a deep recession, but that government policies can be most effective if they (a) caus e the cons ump tion line to shift upw ard by disc oura ging savi ng. (b) redu ce inter est rate s, caus ing busi ness inve stme nt purc hase s to incre ase. (c) pro mot e expo rts, as dom estic inco me level...
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This note was uploaded on 03/20/2008 for the course EC 205 taught by Professor Hymen during the Spring '08 term at N.C. State.

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Quiz 4 - econ omy' An equilibrium level of real GDP is one...

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