Use the following graph to answer the next question.
If the price level is initially at P1, then the economy will adjust by:
A. reducing the price level.
B. decreasing the GDP produced.
C. increasing output produced.
D. increasing the total output demanded.
Answer: C
You might also like to view...
The cyclically adjusted budget is calculated at potential GDP
Indicate whether the statement is true or false
Refer to Figure 12-4. If the market price is $30, should the firm represented in the diagram continue to stay in business?
A) No, it should shut down because it cannot cover its variable cost. B) Yes, because it is making a profit. C) No, it should shut down because it is making a loss. D) Yes, because it is covering part of its fixed cost.
Aid is considered "tied" when it is
a. provided for restricted purposes b. required to be used for purchases from the donor country c. provided in exchange for the recipient's support in the United Nations d. required to be used solely for either public or private projects e. none of the above
Which of the following is true? a. If minimum wage is set below the equilibrium wage, it leads to a labor surplus
b. If anything interferes with the voluntary exchanges that make up a market, equilibrium does not occur. c. Minimum wage helps deal with the problem of unemployment in the market for unskilled labor. d. Producers are willing to employ more labor at a minimum wage. e. Minimum wage leads to a situation of labor deficit in a market.