The net effect of restricting entry into a market is to decrease the income of the remaining suppliers.
Answer the following statement true (T) or false (F)
False
Restricting supply will raise equilibrium price, and the profit of the remaining suppliers will be higher.
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
According to the quantity theory of money, in the long run, an increase in the quantity of money does not change real GDP but does raise the price level
Indicate whether the statement is true or false
Increases in the interest rate reduce the multiplier effect of an increase in government purchases
a. True b. False
The short-run response of quantity demanded to a change in price is usually:
A. greater than the long-run response. B. the same as the long-run response. C. less than the long-run response. D. None of the statements is correct.