For an economy at full employment, an increase in the quantity of money will lead to what sequence of shifts in aggregate demand and supply curves?
What will be an ideal response?
increased aggregate demand, decreased short-run aggregate supply, constant long-run aggregate supply
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Suppose Ford, GM, and Dodge make the majority of pick-up trucks sold in the United States If they all sell for approximately the same price, and Ford offers a $2,000 rebate on new truck sales, what can Ford expect to see?
a. an unprecedented increase in truck sales b. an immediate response by GM and Dodge c. a visit from the antitrust authorities of the government d. a revolution from Ford stockholders e. announcements by GM and Dodge that plans are underway to produce a much cheaper pick-up truck in six years
Which of the following is not true concerning consumer surplus?
a. It is qraphically the area under the demand curve and above the market price. b. It does not exist in equilibrium. c. A leftward shift of the supply curve will decrease consumer surplus. d. A rightward shift of the supply curve will increase consumer surplus.
Which statement about population growth is true?
a. Rapid population growth lacks economic benefits. b. The fastest population growth occurs in wealthy, developed countries. c. Rapid population growth does not have to impede economic growth. d. Population growth usually results in a decline in per capita output.
A system of prices promotes mutually advantageous exchanges
What will be an ideal response?