Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C
B. D; B
C. A; B
D. B; C
Answer: B
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The desired reserve ratio is 3 percent. Robert deposits $3,000 in Bank America. Bank America keeps its minimum desired reserves and lends the excess to Fredrica. How much does Bank America lend to Fredrica?
A) $3,000 B) $2,910 C) $300 D) $2,700 E) $900
As more information is gather, the marginal cost of additional information ________ and the marginal benefit of additional information ________
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
Government intervention
a. provides incentives to conduct business in an illegal black market b. plays no role in generating wealth c. is the best way to eliminate poverty d. does not enforce property rights
Which of the following could create a cost advantage for a? monopoly?
A) better technology B) lower friction due to better organization C) standardization D) All of the above