When real GDP is ________ potential GDP, the unemployment rate is ________ the natural unemployment rate
A) greater than; less than
B) less than; equal to
C) equal to; greater than
D) greater than; greater than
A
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An increase in taxes
a. raises aggregate expenditure by raising national income, thereby increasing consumption b. raises aggregate expenditure by raising national income, thereby decreasing consumption c. lowers aggregate expenditure by lowering national income, thereby increasing consumption d. lowers aggregate expenditure by decreasing consumption, thereby lowering national income e. has no effect on aggregate expenditure
The price of A falls by 2 percent, and the quantity demanded of A increases by 2 percent. Meanwhile, the quantity demanded of B increases by 2 percent too. We would conclude that
A) demand for A is elastic, and A and B are substitutes. B) demand for A is elastic, and A and B are complements. C) demand for A is unit-elastic, and A and B are complements. D) demand for A is inelastic, and A and B are unrelated.