An increase in the price level will
a. increase the quantity of aggregate expenditure, shown as an upward movement along the existing aggregate expenditure curve
b. decrease the quantity of aggregate expenditure, shown as an upward movement along the existing aggregate expenditure curve
c. cause an upward shift in the aggregate expenditure curve
d. cause a downward shift in the aggregate expenditure curve
e. have no effect on the aggregate expenditure curve
D
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At the beginning of the Vietnam War, increased military spending in the United States decreased unemployment
Indicate whether the statement is true or false
A rise in stock prices ________ the net worth of firms and so leads to ________ investment spending because of the reduction in moral hazard
A) raises; higher B) raises; lower C) reduces; higher D) reduces; lower
Complete crowding out occurs when the
A) IS curve is horizontal. B) IS curve is vertical. C) LM curve is horizontal. D) LM curve is vertical.
The ability of a firm to raise the price without losing all its sales to rivals is called
a. market power b. social regulation c. economic regulation d. antitrust policy e. natural monopoly