If the price level rises, the effect on the expenditure schedule and equilibrium real GDP is to
A. increase both.
B. decrease both.
C. shift the expenditure schedule upward and decrease equilibrium real GDP.
D. shift the expenditure schedule downward and increase equilibrium real GDP.
Answer: B
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Jimbo has a comparative advantage over Ned in producing a good if
A) Jimbo can produce more of the good than Ned can in a given time period. B) Jimbo has a higher opportunity cost of producing the good than does Ned. C) Jimbo has a lower opportunity cost of producing the good than does Ned. D) Jimbo has to trade off more than Ned does to produce the good.
Which of the following is an example of the free-rider problem?
a. Both Zoe and Zach receive low-cost dental care at the local dental school, so neither of them pays the full cost of the care. b. Alfred receives a free lunch from the local "Meals on Wheels" program because of his low monthly income. Yet his next door neighbor, Alice, is not eligible for the free lunch. c. Bruce owns Buster, a large dog who barks whenever anyone walks near his house. Betty lives next to Bruce, and Buster's barking can be heard whenever anyone walks near her house, too. Thus, Betty receives free protection from burglars because of Buster's barking. d. Sam purchases a burger at a fast food restaurant and gets a second burger free because the restaurant is having a buy one, get one free sale.