Question

Using an AD/AS model, describe what happens to the price level and output in Canada in the short run as a stock market crash reduces personal wealth. Assume that the economy starts in long- and short-run equilibrium.

a) Prices and output will increase.

b) Prices and output will decrease.

c) Prices will increase and output will decrease.

d) Prices will decrease and output will increase.

Using an AD/AS model, describe what happens to the price level and output in Canada in the short run as the world price of crude oil drops significantly. Assume that the economy starts in long- and short-run equilibrium.

a) Prices and output increase.

b) Prices and output decrease.

c) Prices will decrease and output will increase.

d) Prices will decrease and output will increase.

In 2019, Beta’s real GDP per capita was $15,000 and growing annually at 6%. Using the “Rule of 70”, it will take _______ years to double real income per capita and ________ years using the formula F=P(1+g)N (round to the closer half or full 6 year in each case). [2nd decimal, no rounding]

a) 15.02; 14.17 b) 12.00; 17.53 c) 17.67; 17.89 d) 17.67; 18.92

Answer 1