For a fixed inflation rate target, a decrease in the inflation rate corresponds to a ________ the aggregate demand curve and a decrease in exogenous spending corresponds to a ________ the aggregate demand curve.
A. movement down; shift left of
B. movement up; shift right of
C. shift left of; movement up
D. shift left of; shift right of
Answer: A
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According to economic historians, one result of international trade is that it
A) aids in the international transmission of ideas. B) reduces the world-wide output of goods. C) reduces the world-wide consumption of goods. D) causes persistent world-wide inflation.
If there is a sudden increase in government spending, which of the following should the Fed do if it wants to keep output unchanged?
a. Do nothing, since the self-correcting mechanism will adjust the economy b. Sell bonds in the open market c. Wait, since output usually does not change when government spending increases d. Decrease the required reserve ratio e. Buy bonds in the open market
It is possible to represent three dimensions on a two-dimensional graph by using
a. a contour map. b. a razor blade. c. curved lines. d. all of the above.
For a profit-maximizing monopolist,
A. P is unrelated to MR. B. P > MR. C. P = MR. D. P < MR.