In the figure above, the economy is at point A when the price level falls to 100. Money wage rates and all other resource prices remain constant. Firms are willing to supply output equal to
A) $15.5 trillion.
B) $16.0 trillion.
C) $16.5 trillion.
D) None of the above answers is correct.
A
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When asset prices increase above their fundamental values it is called an
A) asset-price bubble. B) irrational bubble. C) asset-price spike. D) irrational spike.
If the economic growth rate SLOWS from 5% to 1%, the simple accelerator hypothesis suggests that
A) investment will continue to rise as output increases. B) investment will fall as output increases. C) investment will accelerate since output growth is positive. D) None of the above is correct.
Figure 4-25
Refer to . Consumer surplus before the tax was levied is represented by area
a.
A.
b.
A + B + C.
c.
D + E + F.
d.
F.
According to traditional Keynesians, when the central bank increases the money supply during a recession
A. people will refuse to use the money. B. people will keep most of it in their bank accounts. C. people will borrow more from banks. D. people will spend all of the money on goods and services.