Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2.
B. P2 and Y2.
C. P3 and Y1.
D. P2 and Y3.
Answer: D
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The sustainable upper limit of real GDP is a level of GDP that is
A) greater than potential GDP, but by how much greater is unknown and controversial. B) less than potential GDP, but by how much less is unknown and controversial. C) potential GDP. D) determined only by what is the full employment equilibrium in the labor market. E) None of the above answers is correct because there is no sustainable upper limit to real GDP because real GDP can always be increased.
How does a firm in monopolistic competition decide whether to operate at a loss or shut down in the short run?
What will be an ideal response?
When do the staggered terms of the Federal Reserve governors expire?
a. January 31 of every odd year b. January 31 of every even year c. December 31 of every odd year d. December 31 of every even year
The most common form of economic decentralization involves
A. having very little government involvement in the economy. B. markets, where people buy and sell goods and services. C. government officials making economic decisions. D. government ownership of the means of production.