A rightward shift of the aggregate demand curve will increase real domestic output and the price level in the short run.
Answer the following statement true (T) or false (F)
True
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Which of the following explains why the AD curve is downward sloping?
a. a lower price level forces the government to reduce taxes, shifting the IS curve to the right and increasing income. b. A lower price level forces the central bank to increase the money supply, shifting the LM curve to the right and increasing income. c. A lower price level increases real money balances, shifting the LM curve to the right and increasing income. d. none of the above are correct.
A production possibilities frontier shows the combinations of various goods that should be produced.
Answer the following statement true (T) or false (F)
The size of the underground economy would tend to increase if the government of a country
A) increased income tax rates. B) decreased government regulations on businesses. C) legalized prostitution. D) legalized marijuana.
If unemployment and inflation move inversely, then we can infer that business fluctuations are
a. from the demand side. b. from the supply side. c. from both the demand and supply side. d. purely random events.