Figure 14.1 shows three aggregate demand curves. A shift from curve AD1 to curve AD2 could be caused by a(n):
A. decrease in the money supply.
B. increase in taxes.
C. decrease in the price level.
D. increase in government spending.
Answer: D
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When a celebrity has the desire to have his image protected following his death, this is best described as an example of the protection of
A) a patent. B) intellectual property. C) an invention. D) a trademark.
The change in price that results from a rightward shift in demand will be greater if
A) the supply curve is horizontal than if the supply curve is upward sloping. B) the supply curve is relatively steep than if the supply curve is relatively flat. C) the supply curve is upward sloping than if the supply curve is vertical. D) the supply curve is horizontal than if the supply curve is vertical.
As the interest rate rises, the present value of a given perpetual stream of income
A) increases. B) decreases. C) does not change. D) approaches infinity.
Select the answer which best completes the following statement: "at any point along the long-run aggregate supply curve…"
A. expected inflation equals current inflation and current output is below potential output. B. the economy is moving toward its potential output level. C. expected inflation is moving toward current inflation. D. current output equals potential output and expected inflation equals current inflation.