Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2.
B. P3 and Y1.
C. P2 and Y2.
D. P2 and Y3.
Answer: D
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Which of the following statements is true?
A. A tax applied to an activity that generates a negative externality always brings about the socially optimal level of output. B. A subsidy applied to an activity that generates a positive externality always brings about the socially optimal level of output. C. a and b D. none of the above
Since 1950, it can be observed that the female participation rate in our labor force has
A) increased. B) decreased. C) stayed constant. D) moved erratically up and down.
Economic theory
a. is a deliberate simplification of factual relationships. b. seeks to disprove a hypothesis. c. is based mainly on assumptions. d. seeks to prove political ideals.
The main difference between a firm that is a price searcher and a firm that is a price taker is that a
a. price searcher produces products that are identical to its competitors' products. b. price taker can decide what price to charge for its product. c. price searcher cannot decide what price to charge for its product. d. price searcher will still be able to sell some of its product if it increases its price.