Within the AD/AS model, if consumers and investors become more optimistic about the future direction of the economy,
a. aggregate demand will decrease.
b. aggregate demand will increase.
c. long-run aggregate supply will increase.
d. long-run aggregate supply will decrease.
B
You might also like to view...
The tax on gasoline in England is close to $3.20 per gallon, whereas the federal excise tax on gasoline in the United States is 18.4 cents per gallon. Suppose the U. S. government raised the federal excise tax to the English gas tax rate of $3.20
Explain the likely impact of that higher tax rate on conservation, oil exploration, and the development of substitutes for gasoline.
Suppose there is a $200 billion recessionary ga
What will be an ideal response?
In one week Alice can produce 5 pairs of shoes or 4 bookshelves while Roger can produce 10 pairs of shoes or 6 bookshelves. Alice has ________ advantage in producing ________
A) an absolute; shoes B) a comparative; shoes C) an absolute; bookshelves D) a comparative; bookshelves
Answer the following statements true (T) or false (F)
1. The elasticity of savings with respect to interest rates is the percentage change in the quantity of savings divided by the percentage change in interest rates. 2. The cross-price elasticity of demand is the percentage change in the quantity of good A that is demanded as a result of a percentage change in the price of good B. 3. The general rule stating that the utility-maximizing choice between consumption goods occurs where the marginal utility per dollar is the same for both goods can be shown with this equation: 4. The typical response to higher prices is that a person chooses to consume less of the product with the higher price. This can occur either because of substitution effect or because of income effect, but not both.