In the graph showing aggregate demand and aggregate supply after a positive supply shock, we can see a positive supply shock would cause ______.
a. an increase in price levels and a decrease in RGDP
b. a decrease in price levels and an increase in RGDP
c. an increase in both price levels and RGDP
d. a decrease in both price levels and RGDP
b. a decrease in price levels and an increase in RGDP
You might also like to view...
Which of the following statements is true?
A) Maximum social surplus implies equity. B) Pareto efficiency implies equity. C) Taxation causes redistribution of wealth among the members in a society. D) Market prices act as signals that result in equal distribution of income and wealth in the society.
Refer to Figure 16.1. An increase in the corporate tax rate is best represented by a movement from
A) point A to point B. B) point B to point A. C) point A to point C. D) point C to point A.
Which of the following is not a criticism sometimes leveled at monopolies? a. A monopoly promotes inefficiency
b. A monopoly creates a welfare loss. c. A monopoly retards innovation. d. A monopoly leads to improved economies of scale in production.
Anything that keeps new firms from entering an industry in which firms are earning economic profits.