If aggregate demand decreases and aggregate supply decreases, the level of real output will
A. Decrease, and the price level will definitely decrease.
B. Decrease, but the price level is indeterminate.
C. Either increase or decrease, but the price level will stay the same.
D. Decrease, and the price level will definitely increase.
Answer: B
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The vertical portion of the aggregate supply curve shows that at full employment an increase in the price level will:
A. not alter the economy's full-employment real GDP. B. increase the economy's full-employment real GDP. C. reduce the quantity of goods and services purchasers will demand. D. improve the overall efficiency of resource use.
(Consider This) Which of the following statements is true about U.S. firms?
A. Over half are bankrupt within the first two years after starting up. B. Over half are bankrupt within the first five years after starting up. C. Nearly 65 percent last 10 years or more. D. The life expectancy of a U.S. firm is approximately 22 years.
A decrease in aggregate demand causes a decrease in ________ only in the short run, but causes a decrease in ________ in both the short run and the long run
A) the price level; real GDP B) real GDP; real GDP C) the price level; the price level D) real GDP; the price level
To know the customer is to understand costs
Indicate whether the statement is true or false