An increase in government spending will cause a(n):
A. increase in aggregate supply.
B. decrease in aggregate demand.
C. decrease in aggregate supply.
D. increase in aggregate demand.
Answer: D
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The marginal utility gained from the consumption of successive units of a typical good:
A. tends to decrease. B. tends to increase. C. may increase or decrease depending on the cost of the good. D. tends to stay the same.
If stockholders allow the company to reinvest its profit, then
a. they will be personally liable for additional debts b. the company's stock price will rise c. the company's assets will decline d. these dividends will be distributed to the stockholders e. these profits can only be used to purchase equipment
Which of the following statements best describes the price, output, and profit conditions of monopoly?
a. Price will equal marginal cost at the profit-maximizing level of output and profits will be positive in the long-run. b. Price will always equal average variable cost in the short-run and either profits or losses may result in the long run. c. All of the answers are correct. d. In the long-run, positive economic profit will be earned.
Figure 12-5 shows cost and demand curves facing a typical firm in a constant-cost, perfectly competitive industry. Refer to Figure 12-5. If the firm's fixed cost increases by $1,000 due to a new environmental regulation, what happens in the diagram above?
A) All the cost curves shift upward.
B) Only the average variable cost and average total cost curves shift upward; marginal cost is notaffected.
C) Only the average total cost curve shifts upward; the marginal cost and average variable cost curves are not affected.
D) None of the curves shifts; only the fixed cost curve, which is not shown here, is affected.