Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:
A. P4 and Y1.
B. P4 and Y2.
C. P5 and Y1.
D. P5 and Y2.
Answer: D
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What was not true about the New England colonial economy?
a. Fishing was a major economic activity. b. It was a net importer of food and fiber. c. Shipping was a major economic activity. d. It was the most productive area in terms of agriculture.
Both the production of goods and services and the unemployment rate are used to measure
a. the business cycle. b. productivity. c. the interest rate. d. inflation.
If the economy in the graph shown were at point B, and the government wished to bring the economy back to its long-run equilibrium, it might:
A. increase income tax. B. decrease tax credits. C. increase government spending. D. All of these would move the economy to its potential GDP from point B.
If a customer buys an airline ticket based only on the price of the ticket for a particular destination, then the airline ticket is best regarded as a(n)
A. experience good. B. credence good. C. inferior good. D. search good.