Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the long run would be:
A. P2 and Y2.
B. P1 and Y2.
C. P4 and Y2.
D. P1 and Y1.
Answer: B
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Equilibrium wage will increase if quantity of labor demanded rises
Indicate whether the statement is true or false
If the Federal Reserve increases the growth rate of the money supply, in the long run
a. inflation is higher and the unemployment rate is lower. b. inflation is higher while the unemployment rate is unchanged. c. inflation is unchanged while the unemployment rate is lower. d. None of the above is correct.
In which of the following decades did the American government take a more "hands off" or "let it alone" approach in its role in the economy?
A. 1970s B. 1940s C. 1930s D. 1920s
An upturn in business confidence may cause firms to ________ their estimates of MPK, leading to a ________ capital stock that matches MPK to the user cost of capital and thus ________ of net investment
A) lower, larger, a contraction B) lower, larger, an expansion C) lower, smaller, a contraction D) raise, smaller, a contraction E) raise, larger, an expansion