Increased foreign direct investment in India has contributed to its recent economic growth.
Indicate whether the statement is true or false
Ques. 2Refer to Figure 27-1. Suppose the economy is in short-run equilibrium below potential GDP and no fiscal or monetary policy is pursued. Using the static AD-AS model in the figure above, this would be depicted as a movement from
A) A to E. B) C to B. C) B to C. D) B to A. E) A to B.
Ques. 3The dynamic aggregate demand and aggregate supply model accounts for the price level rising every year.
Indicate whether the statement is true or false
Ques. 4Economists have not found a way to predict when recessions will begin and end.
Indicate whether the statement is true or false
Ques. 5If inflation is positive and is perfectly anticipated
A) those that lend money lose. B) no one in the economy loses.
C) those that borrow money lose. D) those that hold paper money lose.
Ques. 6Refer to Figure 27-1. Suppose the economy is in short-run equilibrium below potential GDP and Congress and the president lower taxes to move the economy back to long-run equilibrium.
Using the static AD-AS model in the figure above, this would be depicted as a movement from
A) A to B. B) C to B. C) B to C. D) A to E. E) B to A.
Ques. 7Political stability is not a prerequisite to economic growth.
Indicate whether the statement is true or false
Ques. 8Refer to Table 26-3. Consider the hypothetical information in the table above for potential real GDP, real GDP, and the price level in 2016 and in 2017 if the Federal Reserve does not use monetary policy.
If the Fed uses monetary policy successfully to keep real GDP at its potential level in 2017, which of the following will be lower than if the Fed had taken no action?
A) real GDP and the inflation rate B) real GDP and potential GDP
C) potential GDP and the inflation rate D) real GDP and the unemployment rate
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