An increase in the price level
a. increases investment spending, thereby shifting the AD curve to the left
b. does not shift the AD curve
c. causes the government's budget deficit to fall
d. increases investment spending, thereby shifting the AD curve to the right
e. shifts the AS curve outward
B
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The long run is a time period that is
A) five years or longer. B) long enough to change the amount of labor employed. C) long enough to change the size of the firm's plant and all other inputs. D) long enough to change the amount of labor employed but not to change the size of the plant. E) None of the above answers describes the long run.
A competitive, unregulated market would
A) produce too much pollution because pollution is an external cost. B) produce too little education because education has an external benefit. C) fail to achieve equilibrium if there are externalities present. D) Both answers A and B are correct. E) Both answers B and C are correct.
Why does popular democracy, as defined in the U.S. Constitution, contribute to long-term economic growth and political stability?
(a) It allows regular change in the structure of the government. (b) It provides incentive to invest, innovate and invent. (c) It permits the President of the U.S. to choose fiscal policies to advance contemporary mercantilism. (d) It transfers wealth from the extremely wealthy to the desperately poor.
One reason firms in monopolistic competition can charge different prices is that their products are
a. identical. b. similar. c. differentiated. d. guaranteed.