Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2.
B. P2 and Y2.
C. P3 and Y1.
D. P2 and Y3.
Answer: D
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Assuming a long-run aggregate supply curve, a decrease in taxes results in ________ in output and ________ in price level
A) no change; an increase B) an increase; no change C) a decrease; a decrease D) no change; a decrease
Why doesn't the electric company ever offer sale prices?
a. The government regulates electricity prices. b. A sale would encourage high usage and cause blackouts. c. Electricity is a necessity, so demand is inelastic. d. The electric company is greedy and does not care
If a new unit excise tax is levied on bottles of soda, the
A) demand for soda shifts to the left. B) demand for soda shifts to the right. C) supply of soda shifts to the right. D) supply of soda shifts to the left.
Based on its current rate of growth, health care spending as a percentage of GDP through Medicare, Medicaid, and other U.S. government programs is expected to
A) stabilize within the next 20 years. B) account for a majority of spending as a percentage of GDP within 5 years. C) slow down during this decade. D) double over the next 40 years.