A downward shift in the Fed's policy reaction function corresponds to a ________ the aggregate demand curve and a decrease in exogenous spending corresponds to a ________ the aggregate demand curve.
A. movement up; shift right of
B. shift left of; movement up
C. shift right of; shift left of
D. shift left of; shift right of
Answer: C
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Which of the following is true?
A) If the price of a substitute rises, the demand curve shifts leftward. B) An increase in the cost of producing a good shifts the demand curve leftward. C) An increase in population shifts the demand curve leftward. D) If people expect the price of a good will rise in the future, the demand curve shifts leftward. E) For an inferior good, when income increases, the demand curve shifts leftward.
Which of the following would make a reasonable hypothesis to test?
A) Rising inflation is bad for the U.S. economy. B) An inflation rate above 4% is dangerous for the British economy. C) As interest rates increase, eventually the inflation rate will decline. D) Increases in inflation are worse for the U.S. economy than are increases in public sector borrowing.
If, at the point where MR = MC, the firm incurs losses, in the short run the firm should:
a. shut down. b. increase output. c. decrease output. d. continue at its current output if P > AVC. e. continue at its current output if P > ATC.
Focusing on real GDP per capita allows economists to control for how ______ impacts economic growth.
a. annual percentage change b. the standard of living c. population growth d. international changes