The intersection of the aggregate supply curve and the aggregate demand curve occurs at the economy's equilibrium level of
A) real investment and interest rate
B) real disposable income and unemployment
C) real national output and the price level
D) government expenditures and taxes
E) imports and exports
Ans: C) real national output and the price level
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The Obama stimulus package was implemented to assist the economy in its recovery from recession. This package was designed to shift
A) aggregate demand to the left. B) aggregate demand and aggregate supply to the left. C) aggregate supply to the left. D) aggregate demand to the right.
Discuss the three ranges of the aggregate supply (AS) curve. What could cause the AS curve to shift to the left? What impact would a leftward shift of the AS curve have on the economy?
The negative externality in a pesticide or other chemical market
a. is associated mainly with production of the chemical b. is primarily a consumption externality c. should be modeled as a marginal external cost (MEC) d. is appropriately captured by the MSC function
The figure above shows the market for bank reserves in Futureland. If the Bank of Futureland undertakes an open market purchase of government securities that changes the quantity of reserves by $25 billion, then the federal funds rate will
A) fall to 4 percent a year.
B) remain at 6 percent a year.
C) rise to 8 percent a year.
D) change, but more information is needed to determine by how much.
E) None of the above answers is correct.