A decrease in aggregate demand would shift the curve ______.
a. from AD1 to AD2
b. from AD3 to AD2
c. from AD1 to AD3
d. from AD3 to AD1
c. from AD1 to AD3
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The circular flow model shows that consumer goods and services produced by business firms are sold in the
A) goods market. B) factor market. C) labor market. D) financial market.
Debt service
A) is rarely an issue for high-income countries. B) always makes a country worse off for having borrowed. C) is a problem when the amount of debt is small relative to the size of the economy. D) tends to benefit low- and middle-income countries at the expense of high-income countries.
If the Fed increases the discount rate, it is pursuing
A) a contractionary policy because it will be more costly for banks to borrow funds and this puts upward pressure on interest rates in the economy. B) a contractionary policy because it reduces banks' profit margins by raising the cost of borrowing and lowering the return on lending. C) an expansionary policy because it raises the cost of holding excess reserves in the banking system. D) an expansionary policy because it increases bank profits by putting upward pressure on the interest rates that banks can charge on its loans
Nations specialize when they _____.
(A) Produce certain goods and services more efficiently than other nations. (B) Export more than they import. (C) Have few natural resources and are required to endure a trade deficit. (D) Import more than they export.