Suppose the economy is at full employment and firms become more pessimistic about the future profitability of new investment. Which of the following will happen in the short run?
A) The aggregate demand curve will shift to the right.
B) Unemployment will rise.
C) Prices will rise.
D) Output will rise.
B
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Critics of supply-side economics argue that
a. tax cuts do not affect supply, only demand. b. supply-siders exaggerate the effects of tax cuts. c. incentives have no effect on behavior. d. the goals of supply-siders are not supported by most economists.
Because of the rise of global competition and free trade,
a. antitrust policy may be less necessary than previously thought. b. U.S. industrial concentration poses more of a threat to consumers. c. U.S. markets are becoming less competitive. d. U.S. manufacturers are seeking fewer trade barriers.
Competition for votes between two political parties will cause those parties to
A) produce quite different policy proposals. B) have very similar policy proposals. C) find ways to clearly distinguish themselves in order to give voters a clear choice. D) a and c E) none of the above
If the budget line shifts from BB to bb in the above diagram we can infer that the:
A) price of Y has increased and the price of X has decreased. B) price of Y has decreased and the price of X has increased. C) prices of both X and Y have increased. D) prices of both X and Y have decreased.