Econ Help Please...Mult Choice Questions?

A 10% increase in the price level:


a-increases potential output by more than 10%


b-""by 10%


c-""by less than 10%


d-does not affect potential output.





If inflationary expectations change, then it is likely that:


a-thedistribution of income will change.


b-relative prices will change


c-actual inflation will change


d-faith in the gov and econ policy will be reduced





If the price of recreation(which accounts for about 5% of total expenditures in the CPI basket), rises by 20% in one year while the prices of all other goods remain constant by how much will CPI rise


a-1%


b-5%


c-20%


d-25%





A rise in the value of the dollar relative to other currencies will:


a-increase demand for U.S. goods, shifting the AGG Demand Curve to the right


b-""", """"shift to the left


c-decrease demand for U.S. goods, shifting the AGG demand curve to the right


d-""", "" to the left.





Macroeconomic policy is effective in reducing:


a-frictional


b-natural


c-cyclical


d-structural unemployment

Econ Help Please...Mult Choice Questions?
A-d because if it did affect potential output that would mean that the increase in output would bring the price down


B-c in the self fullfilling prophecy kind of fashion. people expect inflation to rise so buy in an attempty to avoid future price increases


C-d you just do the math of how much is 5% of 20% cross multiply and get the value of x for the total percentage


D-d people will buy fewer american goods switching to cheaper imports and when demand is reduced is translated in a leftward shift


E-c because frictional natural and structural unemployment are equilibrium unemployment which means the government can do very little to resolve them





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Reply:1d 2c 3a 4c 5c





Reason for question 3. 20% of % is 1 so it will become 6%. Thus one % change will occur. mistake in first answer to be corrected