Aggregate demand in India increased in 2008. In addition, real GDP grew strongly and inflation approached 10 percent. The best explanation for this inflation is that
A) aggregate supply did not change.
B) potential GDP decreased.
C) there was a movement up along the aggregate demand curve in 2008.
D) potential GDP increased, but at a slower rate than aggregate demand.
D
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According to Okun's Law, the year-to-year change in the rate of unemployment is ________ if the annual growth rate of real GDP is 5%
A) -5% B) 5% C) 2% D) -1%
Suppose an individual has to make a decision at time t without having all the information relevant for making the decision. At time (t+1), the relevant information is revealed. We will say that the individual made a mistake if his decision in time t would have been different had he known what he knows at time (t+1). True or False: Without behavioral economics, we would not be able to explain mistakes.
Answer the following statement true (T) or false (F)