When fiscal policy makers wish to reduce aggregate demand, they could enact:
A. contractionary fiscal policy.
B. expansionary fiscal policy.
C. contractionary monetary policy.
D. expansionary monetary policy.
A. contractionary fiscal policy.
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The poverty rate is a measure of the percentage of people whose incomes fall below
a. a relative level of income. b. an absolute level of income. c. the median income for a family of three. d. the bottom 20 percent of the income distribution.
A year-long drought that destroys most wheat crops for the season would shift the:
A. short-run aggregate supply curve only. B. aggregate demand curve only. C. aggregate demand curve, and the short-run aggregate supply curve would shift in response. D. short-run aggregate supply curve and the long-run aggregate supply curve.
Suppose some firms exit a monopolistic competition industry. We would expect the demand curve of a firm already in the industry to:
A. become more elastic. B. remain the same since entering firms serve other customers in the market. C. shift to the right. D. shift to the left.
In a competitive industry with identical firms, long-run equilibrium is characterized by:
A. P = AC. B. MR = MC. C. P = MC. D. All of the statements associated with this question are correct.