An increase in aggregate demand:
A. raises potential output.
B. has an unpredictable effect on potential output.
C. reduces potential output.
D. does not change potential output.
Answer: D
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What will be an ideal response?
Suppose a student is attending your college on an athletic scholarship, and doesn't pay a penny for tuition. According to the economic way of thinking, the student's cost of attending college is
A) zero. B) bore completely by the college's athletic fund. C) positive, because the student sacrificed some other opportunity to attend your college. D) positive, because the student still needs food and housing. E) negative, because nobody really gains by trying to combine athletics with higher education.
The principle of compound interest insures that
A) a small difference in the per capita GDP between countries in one year will grow to a large difference in the long run. B) a small difference in the per capita GDP growth rate between countries in one year will grow to a large difference in the long run. C) U.S. interests are compounded by the interests of Great Britain and Germany. D) U.S. interests are compounded by the interests of all other countries.
Economic profit is another name for accounting profit
a. True b. False