A decrease in demand and a decrease in supply will lead to
A. unambiguous increases in both price and quantity.
B. unambiguous decreases in both price quantity.
C. an unambiguous decrease in price, but the effect on quantity is indeterminate.
D. an unambiguous decrease in quantity, but the effect on price is indeterminate.
Answer: D
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When calculating real GDP, the reference base year
A) allows us to account for changes in GNP compared to GDP. B) always reduces the value of GDP compared to GNP. C) allows us to calculate the value of the goods and services in terms of prices of that base year. D) usually increases the value of GNP compared to GDP. E) allows us to increase the value of goods and services.
As wages and prices become more sticky ________
A) the short-run Phillips curve gets flatter B) wages become less responsive to unemployment deviations from the natural rate C) it becomes easier to differentiate the short-run from the long-run Phillips curve D) all of the above E) none of the above