An economy in which output has decreased and prices have decreased would suggest a:
A. decrease in short-run aggregate supply.
B. increase in aggregate demand.
C. increase in short-run aggregate supply.
D. decrease in aggregate demand.
Answer: D
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Which of the following will NOT be included in a bank's liability?
A) Short-term borrowing by the bank B) Demand deposits held with the bank C) Cash equivalents of the bank D) Long-term debt of the bank
Explain the reasons why the AD curve slopes downward
What will be an ideal response?
During October and November 2008, gasoline prices were falling dramatically, making travel by car less expensive but air travel prices were as high as ever. What is TRUE about consumer preferences, possibilities, or choices?
A) The relative price of air travel in terms of travelling by car decreases. B) If travelling by car is a normal good, both the substitution and income effects would lead to a decrease in travelling by car. C) The consumers' budget line would shift outward and its slope would not change. D) If air travel is a normal good, both the substitution and income effects would lead to an increase in air travel.
You deposit $10,000 in a savings account today. If the interest rate is 3%, what is the value in 20 years?
What will be an ideal response?