Assume that the AD curve is held constant and short-run aggregate supply decreases. The result is a(n):
a. increase in both equilibrium real GDP and the price level.
b. decrease in equilibrium real GDP and an increase in the price level.
c. decrease in both equilibrium real GDP and the price level.
d. decrease in equilibrium real GDP, while the price level remains fixed.
e. increase in the price level, while equilibrium real GDP remains fixed.
b
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Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
In the short run, a firm should shut down if its economic loss from operating exceeds its total fixed cost
a. True b. False Indicate whether the statement is true or false
The government banking regulation that places an upper limit on the money supply is
a. deposit insurance by the FDIC. b. reserve requirements on bank deposits. c. periodic bank examinations and audits. d. limitations on the types of assets that a bank may own.
Price discrimination can increase both the monopolist's profits and society's welfare
a. True b. False Indicate whether the statement is true or false