There is an increase in aggregate demand, and firms do not have sufficient capital and labor to support an output increase. In this case, inventory stocks will
A. continue to increase, and there will be a large increase in the price level.
B. continue to fall, and the price level will fall.
C. continue to fall, and there will be a large increase in the price level.
D. remain unchanged, and the price level will remain unchanged.
Answer: C
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A) permanent supply shocks B) temporary supply shocks C) aggregate demand shocks D) all of the above E) none of the above
A household member's decision about how much labor to supply is most closely linked to
a. the supply of factors of production other than labor. b. technological change. c. the tradeoff between leisure and work. d. immigration trends.
All coins in circulation within the United States are:
A. checkable deposits. B. near monies. C. time deposits. D. token money.
When a household's disposable income falls to zero, what do we expect will happen?
A. The household's consumption spending also falls to zero. B. The household will maintain a positive level of saving. C. Consumption will fall to the level of autonomous consumption. D. The household will maintain its previous level of consumption.