Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output
B. D; an expansionary
C. B; recessionary
D. D; a recessionary
Answer: D
You might also like to view...
The above figures show the market for gasoline. Which figure(s) shows the effect of a decision by the OPEC countries in the Middle East to export less oil to the rest of the world?
A) Figure B B) Figure C C) Figure D D) Figures B and C
Frictional unemployment increases when
A) real GDP decreases and the unemployment rate rises. B) the number of workers who quit one job to find another increases. C) discouraged workers drop out of the work force. D) workers are replaced by machines and the unemployed workers do not have the skills to perform new jobs.
Use a model of the dollar-euro foreign exchange market to illustrate how the value of the dollar is determined in terms of the euro. Identify two factors that would increase the value of the dollar in terms of the euro.
What will be an ideal response?
The price index that measures the changes in prices of ALL goods and services produced by the economy is the
A. PPI. B. Gross Domestic Product (GDP) deflator. C. Personal Consumption Expenditure Index. D. CPI.