Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:
A. P4 and Y1.
B. P4 and Y2.
C. P5 and Y1.
D. P5 and Y2.
Answer: D
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What will be an ideal response?
The unemployment rate is a good measure of the social welfare or social distress because
A) it includes discouraged workers. B) it distinguishes between part-time and full-time job seekers. C) it measures the "importance" of a job to each worker. D) None of the above.
Investment spending is a leakage from the circular flow model
a. True b. False Indicate whether the statement is true or false
If private investment of $100 is added to the economy, the equilibrium levels of income and consumption will change in which of the following ways?
A) Increase/Decrease B) Increase/Increase C) Increase/No change D) No change/Increase E) No change/No change