Refer to Figure 18.1. Which of the following would most likely cause a shift from AD1 to AD2?

A. A decrease in the money supply through open market operations.
B. An increase in transfer payments because of a recession.
C. A decrease in government spending.
D. An increase in the tax rate.


Answer: B

Economics

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If the fixed costs are relatively large, a relatively good approximation of the correct transfer price is

a. average costs b. average fixed costs c. average variable costs d. the market price

Economics

When comparing perfect competition and monopoly, a major assumption made is that

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Economics