Given aggregate demand, a decrease in aggregate supply creates:
A. a higher price level and a higher GDP level.
B. a lower price level and a higher GDP level.
C. cost-push inflation.
D. demand-pull inflation.
Answer: C
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What will be an ideal response?
Roads during the 1800s proved to be a preferred transportation alternative to railroads and thus competed successfully for profits
Indicate whether the statement is true or false
Other things the same, an unexpected fall in the price level results in some firms having
a. lower than desired prices, which increases their sales. b. lower than desired prices, which depresses their sales. c. higher than desired prices, which increases their sales. d. higher than desired prices, which depresses their sales.
Economists predicted that the price of a depletable natural resource would rise by about 15 percent. Actually the price fell 10 percent. What most likely happened?
A. A government subsidy was removed. B. Extraction costs increased. C. Price controls were suspended. D. An unexpected discovery of reserves was made.