According to Baumol and Blinder, from the demand side a decrease in the price level causes aggregate expenditures to
A. fall, resulting in a lower level of equilibrium income.
B. fall, resulting in a higher level of equilibrium income.
C. rise, resulting in a higher level of equilibrium income.
D. rise, resulting in a lower level of equilibrium income.
Answer: C
You might also like to view...
“Circuit breaker” rules halt trading when the Dow declines below its previous day’s closing value by a percentage amount for
A. one hour. B. two hours. C. the remainder of the trading day. D. All three of these periods.
A decrease in the marginal cost arising from a less complex specialized investment environment will cause the optimal contract length to:
A. remain constant. B. increase. C. decrease. D. either increase or decrease.
Refer to the graphs below. Assume that the economy is initially at equilibrium where AD2 and AS intersect in Graph 1, and also assume that the economy is initially at point C in Graph 2. A movement from point C to point B in graph 2 would most likely be associated, in graph 1, with a shift of:
A. AD to the right
B. AD to the left
C. AS to the right
D. AS to the left
The figure above shows that the deadweight loss from the tariff is
A) $20 million per year. B) $30 million per year. C) $15 million per year. D) $55 million per year. E) zero.