Refer to the above diagram. The economy is at equilibrium at point B. If the goal is to move the economy to point A, the appropriate way to accomplish this is through:
A. a shift in the aggregate demand curve from AD1 to AD3.
B. contractionary fiscal policy.
C. expansionary fiscal policy.
D. an increase in taxes.
Answer: C
You might also like to view...
If the marginal propensity to save (MPS) increases, the multiplier
A) decreases. B) can either increase or decrease, depending on what happens to the marginal propensity to consume (MPC). C) increases. D) stays the same.
If a 10 percent increase in price causes a 5 percent increase in quantity supplied, then supply is
A) elastic. B) inelastic. C) unit elastic. D) infinite.
An industry is comprised of 20 firms, each with an equal market share. What is the four-firm concentration ratio of this industry?
A. 0.8 B. 0.2 C. 0.4 D. 0.6
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The economy is currently at Point A. The opportunity cost of moving from Point A to Point B is the
A. 30 LCD televisions that must be forgone to produce 60 additional OLED televisions. B. 90 LCD televisions that must be forgone to produce 20 additional OLED televisions. C. 30 LCD televisions that must be forgone to produce 20 additional OLED televisions. D. 120 LCD televisions that must be forgone to produce 40 additional OLED televisions.