Which of the following would shift the FE line to the left?
A. A decrease in labor supply
B. An increase in the money supply
C. A beneficial supply shock
D. An increase in consumer spending
Answer: A
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The aggregate demand curve is downward sloping because:
A. an increase in the price level will cause an increase in spending. B. at lower price levels, real wealth decreases, causing a decrease in the quantities of goods and services demanded. C. at lower price levels, interest rates decrease, causing a decrease in the quantities of goods and services demanded. D. at lower price levels, exports increase, causing an increase in real GDP.
Assume the price of good Y with its quantity measured on the vertical axis is $20 and the price of good X with its quantity measured on the horizontal axis is $5. If the consumer's budget is $100, then the absolute value of the slope of the budget line is:
A. 100. B. 20. C. 1/4. D. 4.
If the marginal propensity to save is 0.4 and disposable income decreases from $2,000 to $1,000, saving will
A. decrease by $400. B. decrease by $80. C. increase by $80 D. increase by $400.
The Phillips curve appeared to fit the data well for the United States in the
A. 1960s. B. 1970s. C. 1990s. D. 1980s.