If net exports decrease by $20 billion and the economy's MPC is .5, the aggregate demand curve will shift ________.
A. rightward by $20 billion at each price level
B. rightward by $40 billion at each price level
C. leftward by $40 billion at each price level
D. leftward by $20 billion at each price level
Answer: C
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If fluctuations in interest rates become smaller, then, other things equal, the demand for stocks ________ and the demand for long-term bonds ________
A) increases; increases B) increases; decreases C) decreases; decreases D) decreases; increases
Assume a firm has the following cost and revenue characteristics at its current level of output: price=$10.00 . average variable cost=$8.00 and average fixed cost =$4.00 . This firm is
a. incurring a loss of $2.00 per unit and should shut down. b. realizing only a normal profit. c. realizing an economic profit of $2.00 per unit. d. incurring a loss per unit of $2.00 . but should continue to operate in the short run.
Which of the following constitutes a transfer payment?
a. Income taxes b. Corporate salaries c. Fiscal spending d. Dividend payments e. Welfare benefits
In response to a shortage caused by the imposition of a binding price ceiling on a market,
a. price will no longer be the mechanism that rations scarce resources. b. long lines of buyers may develop. c. sellers could ration the good or service according to their own personal biases. d. All of the above are correct.