Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C
B. B; C
C. B; A
D. D; B
Answer: D
You might also like to view...
The M1 money supply
A) is calculated by subtracting M2 from GDP. B) does not include checking account deposits. C) is the narrowest measure of the nation's money supply. D) does not include travelers' checks.
The above figure shows the apartment market in Big City. A rent ceiling of $1400 per month would
A) create a black market. B) increase search activity. C) not affect the market. D) create a surplus of apartments.
If MR > MC, a profit-maximizing firm should increase output
Indicate whether the statement is true or false
One World View article is titled "Glaring Inequalities." Of the countries listed, the greatest inequality in the distribution of income is likely to occur in
A. Canada. B. Namibia. C. Sweden. D. The United States.