Chapter Checkpoint

Study Plan Problems and Applications

  1. As more people in India have access to higher education, explain how potential GDP and aggregate supply will change in the long run.

  2. Explain the effect of each of the following events on the quantity of U.S. real GDP demanded and the demand for U.S. real GDP:

    • The world economy goes into a strong expansion.

    • The U.S. price level rises.

    • Congress raises income taxes.

  3. The United States is at full employment when the Fed cuts the quantity of money, other things remaining the same. Explain the effect ...

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