Law of Supply and Demand
What will be an ideal response?
The claim that the price of any good adjusts to bring the quantity supplied and quantity demanded for that good into balance.
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In the ISLM framework a contractionary fiscal policy causes aggregate output to ________ and the interest rate to ________, everything else held constant
A) increase; increase B) increase; decrease C) decrease; decrease D) decrease; increase
When the price of tablets goes up and fewer tablets are purchased, this is representative of the
A) law of demand. B) law of supply. C) law of market operations. D) law of increasing costs.
If the aggregate supply curve shifts outward, then unemployment
a. and inflation will both decrease. b. and inflation will both increase. c. will increase and inflation will decrease. d. will decrease and inflation will increase.
In 1968, the government instituted a 26 percent income tax surcharge. In terms of the AS/AD model, this change should have:
A. shifted the AD curve to the right. B. shifted the AD curve to the left. C. made the AD curve steeper. D. made the AD curve flatter.