Any permanent change in the quantity of any factor of production available capital, technology, land, or labor can cause a shift in both the long-run and short-run aggregate supply curves
a. True
b. False
Indicate whether the statement is true or false
True
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Assume that MPS is 0.4. If spending increases by $8 billion, then real GDP will increase by
A. $8 billion. B. $15 billion. C. $20 billion. D. $13.3 billion.
If the government replaces a lump sum tax with a proportional labor income tax, then
A) employment and output increase. B) employment increases and output decreases. C) employment decreases and output increases. D) employment and output decrease.
If Weiskamp T-shirt Co lowers its price from $6 to $5 and finds that students increase their quantity demanded from 400 to 600 T-shirts, then the demand for Weiskamp T- shirts within the $5 to $6 price range is
a. price inelastic b. price elastic c. unit elastic d. cross elastic e. income inelastic
If demand falls, what happens to equilibrium price and quantity?
What will be an ideal response?