Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 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. B; C
C. B; A
D. D; B
Answer: D
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The rightward shift of the RS curve will lead to a ________ in the real interest rate, ________ in investment, and ________ in aggregate demand
A) fall; an increase; a decrease B) rise; an increase; an increase C) rise; a decrease; a decrease D) fall; an increase; an increase E) rise; an increase; a decrease
If output changes in fixed proportion to a change in all of a firm’s productive resources, the firm has
a. constant marginal returns. b. constant returns to scale. c. decreasing marginal returns. d. decreasing returns to scale.
Which of the following is most likely to occur when the marginal revenue product of capital increases? a. The price of the product in which capital is used as a resource decreases. b. The equilibrium rental rate for capital increases
c. The demand for labor as a resource increases. d. The demand curve for capital shifts to the left.
For most families, a majority of their property comes from
A. inheritance. B. redistribution programs. C. transfer payments. D. savings.