Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward
B. Short-run aggregate supply shifting downward
C. Aggregate demand shifting rightward
D. Aggregate demand shifting leftward
Answer: B
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Keynes believed that unstable investment caused the Great Depression. Using the simple Keynesian model, explain how a fall in investment affects equilibrium output
What will be an ideal response?
Which of the following most resembles a perfectly competitive market?
A. The stock market B. The publishing industry C. The steel industry D. The new car market
Income elasticity is defined as the
A) percentage change in the quantity demanded of a good resulting from a change in income. B) percentage change in the demand of a good resulting from a one percent change in income. C) change in quantity demanded resulting from a change in income. D) percentage change in the quantity demanded of a good resulting from a one percent change in income.
According to the text, which of the following are both imports and exports for the United States?
A. Cars, computers, and auto parts. B. Computers, oil, and auto parts. C. Baseballs, computers, and cars. D. No single product can be both an import and an export for a given country.