Use the following graph to answer the next question.
If AD1 shifts to AD2, then the equilibrium output increases from ________.
A. Q1 to Q2 while the price level rises from P1 to P2
B. Q1 to Q2 while the price level falls from P2 to P1
C. Q1 to Q3 while the price level rises from P1 to P2
D. Q1 to Q3 while the price level falls from P2 to P1
Answer: A
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A bank run is
A) a large-scale, panicky withdrawal of deposits from a bank. B) the transfer of funds from one bank to another. C) a situation when a bank borrows from the Fed's discount window. D) a situation in which a bank borrows at the Federal funds rate.
The most significant problem in trying to empirically measure the real rate of interest is that
A) there are so many different types of bonds. B) expected inflation is unobservable. C) interest rates fluctuate so much from day to day. D) banks infrequently change the prime rate of interest.
What is the correct definition for mutual interdependence?
a. when a firm shapes its policy with an eye to the policies of competing firms b. when an oligopolistic firm has control over an important input c. when a small firm in an industry sells all it wants at the market price d. when substantial numbers of firms are present in an industry
Suppose Indiana produces only steel and corn, with fixed amounts of land, labor, and capital resources. Which scenario best sets the stage for economic growth?
A) The unemployment rate in Indiana rises from 5% to 6%. B) The Midwest has a devastating drought. C) The percentage of Indiana residents with a college degree rises from 25% to 30%. D) The United States imports more and more low-cost steel from Asian countries.