Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary
B. B; no output
C. B; expansionary
D. A; a recessionary
Answer: A
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The short-run price elasticity of demand for refrigerators is relatively inelastic
Indicate whether the statement is true or false
An increase in the demand for commercial complexes will: a. shift the demand for land curve to the left. b. shift the demand for land curve to the right. c. decrease the rental earnings from land
d. decrease the quantity of land demanded.
A hailstorm kills all of the wheat in Minnesota. What will happen to the price and quantity of wheat sold in the U.S.?
A. Equilibrium price falls, equilibrium quantity falls. B. Equilibrium price rises, equilibrium quantity falls. C. Equilibrium price rises, equilibrium quantity rises. D. Equilibrium price falls, equilibrium quantity increases.
A rightward shift in aggregate demand will cause an increase in output and price level if aggregate supply is
A. Downward-sloping to the right. B. Upward-sloping to the right. C. Horizontal. D. Vertical.