Which of the following accurately contrasts AD2 and AD3?
a. AD2 shows an increase in price level; AD3 shows a decrease in price level.
b. AD2 shows a decrease in price level; AD3 shows an increase in price level.
c. AD2 shows an increase in real GDP demanded; AD3 shows a decrease in real GDP demanded.
d. AD2 shows a decrease in real GDP demanded; AD3 shows an increase in real GDP demanded.
c. AD2 shows an increase in real GDP demanded; AD3 shows a decrease in real GDP demanded.
You might also like to view...
A doubling of the current minimum legal wage is likely to confer the most benefit and impose the least harm on members of which group listed below?
A) Employers who own small businesses B) Highly skilled workers C) Shareholders of large corporations D) Teenagers E) Unskilled workers
If, at the current exchange rate between the dollar and the Norwegian kroner of 5.78 kroner per dollar, the dollar is "overvalued," how do you expect demand and supply in the foreign exchange markets to respond?
A) The demand for the dollar will fall, while the supply of the kroner will rise. B) The demand for the dollar will rise, while the supply of the kroner will fall. C) The supply of the dollar will rise, while the demand for the kroner will fall. D) The supply of the dollar will rise, while the demand for the kroner will rise.
If the government levies a $500 tax per car on sellers of cars, then the price received by sellers of cars would
a. decrease by less than $500. b. decrease by exactly $500. c. decrease by more than $500. d. increase by an indeterminate amount.
The multiplier principle explains how
A. any change in the economy has a one-time impact. B. $1 invested will increase GDP by more than $1. C. expenditures and incomes decrease as investment increases. D. $1 invested will decrease GDP by less than $1.