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G c onstantdollarnationalincome c d

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Unformatted text preview: l output growth. p C) long-run equilibrium. a D) labour shortage. a E) recessionary output gap. a 32) onsider an economy in long-run equilibrium where factor supply is C 32) ______ 2.5 million units, the factor utilization rate is 0.85 and a simple measure of productivity (GDP per factor employed) is $200. Now suppose that, other things being equal, the productivity measure rises to $210. The effect of this change will be A) n increase in this economyʹs potential output, and an adjustment a back to its original level after factor prices have adjusted. B) n inflationary gap caused by simultaneous rightward shifts of the a aggregate demand and aggregate supply curves. C) n increase in this economyʹs potential output in the long run. a D) rightward shift of the aggregate supply curve, and an a adjustment back to Y*. E) rightward shift of the aggregate demand curve due to the a increased wealth of the private sector. The diagram below show the market forloanable funds assuming that national income is constant at Y*. FIGURE 26-2 33) efer to Figure 26-2. Suppose national saving is reflected by NS0 and R 33) ______ investment demand is reflected by I0D. If the real interest rate is i4, there is ________, which will drive the real interest rate up to i*. A) n excess supply of loanable funds a B) n excess demand for public saving a C) n excess demand for loanable funds a D) n excess supply of financial capital a E) n excess supply of saving a 34) robably the most commonly used measure of national income is P A) ollar value of potential output. d B) ross national product. g C) onstant dollar national income. c D) ross domestic product. g E) urrent dollar national income. c 35) he term ʺfixed investmentʺ refers to T A) he existing capital stock. t B) nvestment in plant and equipment. i C) nvestment in stocks and bonds. i D) otal investment minus depreciation. t E) one of the above. n 36) ndesired or unplanned inventory accumulation is likely to occur when U A) onsumption exceeds investment. c B) utonomous expenditure e...
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