With respect to Figure 7-2, an increase in government spending
a. shifts the IS curve to the left by G(? b/1 ? b).
b. shifts the IS curve to the right by G(1 ? b/1 ? b).
c. shifts the IS curve to the right by G(1/1 ? b).
d. does not shift the IS curve.
C
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The lowest point on a perfectly competitive firm's short-run supply curve corresponds to the minimum point on its
A. AFC curve. B. MC curve. C. AVC curve. D. ATC curve.
Monopolies can make an economic profit in the long run because there
A) are close substitutes for the product. B) is free entry and exit. C) is inelastic demand from consumers. D) is a barrier to entry.
A decrease in the price level in an economy will _____
a. increase the real value of dollar-denominated assets b. shift the aggregate expenditure line downward c. decrease the equilibrium level of output demanded d. cause an upward movement along the aggregate demand curve e. shift the aggregate demand curve leftward
A firm should invest more if Tobin's q
A. equals zero. B. is more than one. C. equals one. D. is less than one.