Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:
A. P4 and Y1.
B. P4 and Y2.
C. P5 and Y1.
D. P5 and Y2.
Answer: D
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If the government raised taxes and reduced government spending in order to reduce the budget deficit, monetary policy could accommodate this policy by
a. increasing money demand. b. increasing money supply. c. decreasing money supply. d. increase unemployment insurance.
Which statement is true?
A. Virtually all of the poor receive public assistance, but not food stamps. B. Virtually all of the poor receive food stamps, but not public assistance. C. Virtually all of the poor receive public assistance and food stamps. D. None of these statements are true.
Juan wants to migrate from Mexico to the United States but knows he cannot do so legally at this time. If he decides to attempt to enter the United States illegally, which of the following costs will he most likely not face?
A. Payment to an expediter ("coyote") to facilitate his entry into the United States. B. A green card application fee. C. The loss of income from his current factory job. D. All of these are costs he must incur to migrate.
How do the price and quantity of a monopoly compare to that of a perfectly competitive industry?
What will be an ideal response?