If expectations of future income become more optimistic, which of the following would occur?
a. Nothing would occur.
b. The consumption-income line would shift downward.
c. The consumption-income line would shift upward.
d. There would be an rightward movement along the consumption-income line.
e. There would be a leftward movement along the consumption-income line.
C
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In the new Keynesian model, a positive, permanent supply shock will result in ________
A) an increase in aggregate demand B) a decrease in aggregate demand C) no change in aggregate demand D) a change in aggregate demand, only if the shock is anticipated
The argument that consumers will not be willing to pay any more for two items sold as one than they would for the two items sold separately is used to justify the legality of which of the following?
a. resale price maintenance b. tying c. predatory pricing d. free-riding
If the U.S. government increases its expenditures (without any change in taxes) and at the same time the Federal Reserve Bank increases the money supply, the AD curve would:
A. become steeper. B. shift to the left. C. become flatter. D. shift to the right.
Supply curves
A) slope upward. B) slope downward. C) are horizontal. D) can have many shapes.