The main goal of macroeconomic policy is to: Select one: a. Balance the federal

Question

The main goal of macroeconomic policy is to:

Select one:

a. Balance the federal budget.

b. Continue to increase GDP growth.

c. Expand the trade surplus.

d. Move the economy toward potential GDP.

Which would most likely increase aggregate supply?

Select one:

a. an increase in productivity

b. an increase in the prices of imported products

c. a decrease in net exports

d. a decrease in business subsidies

The intersection of the aggregate demand and aggregate supply curves determines the:

Select one:

a. horizontal range of the aggregate supply curve.

b. equilibrium level of real domestic output and prices.

c. vertical range of the aggregate supply curve.

d. economic growth and inflation

The economy experiences an increase in the price level and a decrease in real domestic output. What is a likely explanation?

Select one:

a. government expenditures decreased

b. productivity has increased

c. resource prices have increased

d. business taxes have decreased

The economy experiences an increase in the price level and an increase in real domestic output. Which is a likely explanation?

Select one:

a. the stock of capital has increased

b. wage rates have fallen

c. net exports have increased

d. interest rates have increased

Explanation / Answer

Solution-

Which would most likely increase aggregate supply?

The correct option is A. an increase in productivity.

Reason-

Productivity is a component of input per economic product. Input consists of labor and capital, and production is calculated according to the factors of revenue and other gross domestic product (GDP) as business inventories.Hence, when productivity increases aggregate supply will increases.

The intersection of the aggregate demand and aggregate supply curves determines the: equilibrium level of real domestic output and prices.

The correct option is B. equilibrium level of real domestic output and prices.

Reason-

Equilibrium point is where at supplied quantity and demanded quantity is equal or same.Equilibrium price and real GDP is at that point where the intersection the quantity of real GDP demanded equals the quantity of real GDP supplied occure.

The economy experiences an increase in the price level and a decrease in real domestic output. What is a likely explanation?

The correct option is C. resource prices have increased.

Reason-

When price of inputs increases, price of product also increases and When price increases demanded quantity also decreases because of decrease in demand of the product. Resources means the inputs.

The economy experiences an increase in the price level and an increase in real domestic output. Which is a likely explanation?

The correct option is C. net exports have increased.

Reason-

When price level rises and export rises, Real domestic output also increases and an increase in exports rises aggregate demand.

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