Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C
B. B; C
C. B; A
D. D; B
Answer: D
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The supply and demand model assumes
A) no buyer or seller can unilaterally influence the price of the product. B) each unit sold is sold at the same price. C) suppliers and demanders know the price of the product. D) All of the above.
Policy makers can select from a number of different exchange rate regimes and exchange rate policies. Which of the following policies would most likely represent a hard peg?
A) a revaluation B) a devaluation C) a flexible exchange rate regime D) a dollarization
The use of foreign exchange reserves to keep exchange rates constant over time is called
A. barter exchange system. B. a fixed exchange rate system. C. the Bretton Woods system. D. a floating exchange rate system.
Refer to the information provided in Table 2.1 below to answer the following question(s). Table 2.1?KrystalMarkWriting Poems812Writing TV Commercials24Refer to Table 2.1. For Krystal, the opportunity cost of writing four TV commercials is ________ poems.
A. 2 B. 8 C. 16 D. 32