Refer to the above figure. An increase in aggregate demand between real Gross Domestic Product (GDP) levels Y0 and Y1
A) would not increase output since the economy is already working at full capacity.
B) would have no effect on the price level.
C) would cause price levels to fall.
D) would most likely result in some inflation.
D
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If Congress conducted public hearings to decide whether subsidies should be granted to the steel industry, taxpayers would not be well represented at the hearings because
A) no hearing room would be large enough to hold all the taxpayers who would want to testify. B) single taxpayers do not have a large enough stake in the issue to justify the cost of attending the hearings. C) taxpayers would not gain or lose, no matter how the issue was decided. D) they are apathetic. E) they know only money buys votes.
One of the more unique aspects of NAFTA compared with other preferential trade arrangements is the fact that the NAFTA countries have
A) similar cultures. B) fixed exchange rates. C) common borders. D) very different standards of living.
Which of the following best illustrates the mutual interdependence among firms in the airline industry?
A) The considerable efforts made by the various competitors to coordinate fare increases. B) The unwillingness of individual firms to match increased amenities offered by other firms. C) The substantial profits airlines have earned over the past several years. D) The virtual absence of control over costs by any of the firms operating in the industry.
A good that has social costs that are equal to private costs has a price that is
A) too high. B) too low. C) just right. D) equal to marginal cost.