Use the following diagrams to answer the next question.
Assume the economy is on aggregate demand AD1. The Fed should attempt to raise investment by enough to shift aggregate demand from AD1 to ________.
A. AD2 and then to AD3
B. AD3 and then to AD4
C. AD4 and then to AD3
D. AD3 and then to AD2
Answer: A
You might also like to view...
The rate at which one currency can be traded for another is called the
A) terms of trade. B) exchange rate. C) transfer rate. D) coupon rate.
GDP does count:
a. state and local government purchases. b. spending for new homes. c. changes in inventories. d. none of these.
In a free-market economy, a product that entails a spillover benefit will be:
A. overproduced. B. underproduced. C. associated only with goods and services provided by the government. D. produced at the optimal level.
A student has a job that pays a wage rate of $20 per hour. The night before an economics exam, the student has set aside four hours to study for the exam, estimating that for each hour spent studying, her grade will rise by 5 points. That night, she gets a call from her employer to come to work for a wage rate of $15 per hour for that night. She decides to work for three hours and earn an extra $45. The next day she takes the test and gets a grade of 75. The opportunity cost for her work is
A. the three hours she did not study. B. the entire four hours she set aside for studying. C. the $45 she earned. D. the 15 extra points she estimates that she could have earned on the exam if she had studied the extra three hours.