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Which of the following statements about the wealth effect is correct?

If the price level rises, real wealth

increases, which increases current consumption expenditure and decreases saving.

decreases, which increases current consumption expenditure and decreases saving.

decreases, which increases current consumption expenditure and increases saving.

increases, which increases current consumption expenditure and increases saving.

decreases, which decreases current consumption expenditure and increases saving.

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Las preparo siempre al vapor.

las verduras

los huevos

el pescado

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¿La tomas fría?

los refrescos

el zumo de limón

la cerveza

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¿Los pones en la nevera?

los plátanos

la leche

las patatas

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Lo compro en el mercado.

el pescado

la carne

las verduras

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Short Description: A graph of price level versus real G D P. Long Description: The vertical axis is labelled, price level (G D P deflator, 20 12 = 100) and ranges from 60 to 110 in increments of 10 with a kink near the origin. The horizontal axis is labelled, real G D P (billions of 20 12 dollars) and ranges from 320 to 520 in increments of 40 with a kink near the origin. The line for S A S slopes upward from the lower left corner to the upper right corner passing through the points (340, 70) and (400, 85). The line for A D slopes downward from the upper left corner to the lower right corner, passing through the points (360, 100), (400, 85), and (440, 70). The line for L A S is a vertical line from the point (440, 0) on the horizontal axis passing through the point (440, 70).

Refer to Figure 10.3.1, which shows the AS-AD model in which an economy is in short-run macroeconomic equilibrium. When this economy automatically adjusts to long-run equilibrium, which of the following situations occur?

The actual unemployment exceeds the natural unemployment rate.

Real GDP is $440 billion.

Potential GDP is greater than in the short run.

Both A and B occur.

The price level is 70.

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Which of the following events occur when the money wage rate rises?

A movement occurs up along the SAS curve.

The SAS curve shifts rightward.

A movement occurs up along the LAS curve if the price level rises the same percentage as the money wage rate.

A movement occurs down along the SAS curve.

The LAS curve shifts rightward.

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Which of the following events will increase aggregate demand?

a decrease in the quantity of money

a decrease in the price level

a decrease in government spending

an increase in taxes

an increase in transfer payments

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In which of the following situations is an economy at full-employment equilibrium?

All who are willing and able to work are working, and businesses are paying fair wages.

Real GDP equals potential GDP.

Aggregate demand equals short-run aggregate supply.

All who are willing and able to work, are working.

Real GDP equals potential GDP and no unemployment exists.

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An economy's price level rises and real GDP increases. Which of the following events is a possible source of the changes?

a decrease in the quantity of money

a decrease in expected future income

an increase in the quantity of capital

an increase in factor prices

an increase in expected future profits

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