Let D = demand, S = supply, P = equilibrium price, and Q = equilibrium quantity. What happens in the market for electric vehicles if the government offers incentives to manufacturers to produce more electric vehicles?
A) S increases, D no change, P decreases, Q increases
B) D no change, S increases, P decreases, Q decreases
C) D increases, S no change, P and Q increase
D) D and S increase, P and Q decrease
A
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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
"Government should act to reduce poverty levels."
A) This statement is a normative statement. B) This statement is a positive statement. C) This statement is an example of the fallacy of composition. D) This statement is an example of the post hoc fallacy.
The _____ is the change in the purchasing power of assets that causes spending to change when the price level changes
a. purchasing power effect b. interest rate effect c. substitution effect d. income effect e. real-balance effect
If Germany can make compact cars more efficiently than Russia, it enjoys
A. a comparative advantage. B. an absolute advantage. C. no advantage.