Suppose that the percentage change in supply is -50%, the price elasticity of demand is 4, and the price elasticity of supply is 1. The equilibrium price will:
A. decrease by 10 percent.
B. increase by 55 percent.
C. increase by 10 percent.
D. decrease by 55 percent.
Answer: C
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What will be an ideal response?
Spending VCU4 on real-world goods and services causes the nation's:
a. Demand for real goods and services to remain the same and monetary base to rise. b. Demand for real goods and services to rise and M2 money supply to rise. c. Demand for real goods and services to rise and M2 money multiplier to remain the same. d. Demand for real goods and services to remain the same and M2 money supply to rise.
Which of the following statements accurately describes the growth of this economy?
a. The total spending in the economy grew faster than total production, with a price level change from PL1 to PL2.
b. Long-run economic growth is illustrated by the shift from LRAS2 to LRAS1.
c. The aggregate demand curve shifted from AD2 to AD1 due to increased spending by consumers, firms, and government.
d. The LRAS curve shifted further to the right than did the AD curve.
To close a recessionary gap using fiscal policy, the government can _____
Fill in the blank(s) with the appropriate word(s).