Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output
B. D; an expansionary
C. B; recessionary
D. D; a recessionary
Answer: D
You might also like to view...
A firm will continue to purchase and use land until the:
A) value of marginal product of land equals the price of land. B) value of average product of land equals the marginal product of land. C) value of marginal product of land equals the marginal product of labor. D) value of marginal product of land equals the marginal product of capital.
Market failure occurs when
a. all Pareto improvements are undertaken b. refusal to make a side payment reduces Pareto efficiency c. the economy operates above the production possibilities frontier d. markets are perfectly competitive e. some Pareto improvements are not made
What is the level of net benefits when 20 units are produced?No. units producedTotal RevenueTotal Costs000101204020200100302701704031026050330370
A. 10 B. 100 C. 80 D. -100
Monopolies impose the largest deadweight loss in markets with elastic demands.
Answer the following statement true (T) or false (F)