Economic growth causes the
A. production possibilities curve to shift leftward and the long-run aggregate supply curve to shift rightward.
B. production possibilities curve to shift rightward and the long-run aggregate supply curve to shift leftward.
C. production possibilities curve to shift leftward and the long-run aggregate supply curve to shift leftward.
D. production possibilities curve to shift rightward and the long-run aggregate supply curve to shift rightward.
Answer: D
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The direct effect of an increase in the money supply is to
A) raise interest rates as people increase their saving. B) decrease aggregate demand as people anticipate future economic problems. C) increase interest rates as people anticipate higher inflation in the future. D) increase aggregate demand as people try to spend their excess money balances.
In the context of insurance, everyone typically has to pay a higher premium because of:
A. risk pooling. B. diversification. C. risk aversion. D. adverse selection.
Hired housekeepers, nannies, and cooks, working in households as either employees or self-employed persons, earn incomes for productive services that are not counted in GDP
Indicate whether the statement is true or false
Which of the following does NOT decrease aggregate demand in the United States?
A. a decrease in the price of oil B. a decrease in GDP in Germany C. a decrease in government spending D. a decrease in the supply of money