One of the fundamental problems in economics is how to deal with ________.
limited resources but practically unlimited economic desires
limited resources and limited desires
unlimited resources and limited desires
unlimited resources and unlimited desires
limited resources but practically unlimited economic desires
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New Keynesian inflation dynamics predicts that an increase in aggregate demand will generate, in chronological order
A) a rightward movement along a horizontal short-run aggregate supply curve, a short-run increase in real GDP, an upward shift in the short-run aggregate supply curve, and an increase in the price level. B) a leftward movement along a horizontal short-run aggregate supply curve, a short-run decline in real GDP, a downward shift in the short-run aggregate supply curve, and a decrease in the price level. C) an leftward shift in a vertical short-run aggregate supply curve, a short-run decline in real GDP, an upward movement along the short-run aggregate supply curve, and an increase in the price level. D) a rightward shift in a vertical short-run aggregate supply curve, a short-run increase in real GDP, an upward movement along the short-run aggregate supply curve, and an increase in the price level.
The extent to which investment spending changes with changes to income is called the:
A) marginal propensity to consume. B) marginal propensity to save. C) marginal propensity to import. D) marginal propensity to invest.
In response to the recession of 2008-2009, the United States
a. increased government spending as a share of the economy and enlarged the size of the budget deficit. b. reduced government spending as a share of the economy and shifted the budget toward a surplus. c. increased government spending as a share of the economy and shifted the budget toward a surplus. d. reduced government spending as a share of the economy and enlarged the size of the budget deficit.
Based on this graph, the multiplier effect shifts the aggregate demand curve from ______.
a. AD1 to AD2
b. AD2 to AD1
c. AD2 to AD3
d. AD1 to AD1