If incomes fall, then
A. the budget constraint shifts inward.
B. there is no change in the budget constraint.
C. there is no relationship between the budget constraint and income.
D. the budget constraint shifts out.
Answer: A
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Refer to the table below. Relative to Free Cows, Happy Cows' marginal cost curve is ________, which makes its quantity produced ________ sensitive to changes in demand.
Happy Cows and Free Cows are two separate perfectly competitive dairy farms. The table above shows the respective firms' marginal cost at various production levels.
A) flatter; less
B) flatter; more
C) steeper; less
D) steeper; more
If the growth rate of the money supply were 4% and the growth rate of the velocity of money were 2%, then which of the following could be a point on the aggregate demand curve?
A. Inflation of 3% and real growth of 3% B. Inflation of 6% and real growth of 6% C. Inflation of 4% and real growth of 4% D. Inflation of 2% and real growth of 2%
An increase in AD will primarily increase the price level when the economy is on the steep part of the AS curve.
Answer the following statement true (T) or false (F)
Stabilization policy may be necessary to modify or counteract volatile changes in aggregate demand
a. True b. False Indicate whether the statement is true or false