When the price level is below the level at which the aggregate demand curve crosses the long run aggregate supply curve
A. actual real GDP would be less than total planned real expenditures, and the price level will rise.
B. there will be pressures that will lead to a shift of either the aggregate demand or the long run aggregate supply curves.
C. actual real GDP would exceed total planned real expenditures, and the price level will fall.
D. there will be no price level change.
Answer: A
You might also like to view...
What is the most appropriate test to evaluate whether a government-spending program will improve living standards and lead to higher income levels?
A) The value of the output generated by the government-spending program compared to its opportunity cost B) The total number of jobs created by the program C) The reduction in the rate of unemployment as the result of the spending on the program D) The taxes necessary to finance the program compared to the revenues generated by the additional employment created by the program
If a market basket was defined in 2014 and it cost $10,000 to purchase the items in that basket in 2014, while it cost $11,000 to purchase those identical goods in 2015, then the inflation rate from 2014 to 2015 is
A. (110-100)/100*100%=10%. B. (100-100)/100*100%=0%. C. (100-90.9)/100*100%=9.1%. D. unknown given this data.
Suppose you get a tax refund of $20,000 and instead of spending it on items that had been on your wish list for two years, you put it all in your checking account at the First National Bank of Urbana. And if that deposit allows the bank to loan out $17,000 . then the legal reserve requirement must be
a. 0.15 percent b. 0.85 percent c. 1.5 percent d. 8.5 percent e. 15 percent
Of the curves displayed in the graph shown, what does curve B most likely represent?
A. Average variable cost B. Marginal cost C. Average fixed cost D. Average total cost