Which of the following will cause a leftward shift in the aggregate demand curve?
A) a reduction in the money supply
B) an increase in taxes
C) a reduction in government spending
D) all of the above
D) all of the above
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When the market for a commodity is in equilibrium:
A) there will still be some unsold stock of the commodity. B) all sellers of the commodity will want to change their behavior. C) no economic agent will want to change his or her behavior. D) all buyers of the commodity will want to change their behavior.
Macroeconomics deals with
A) aggregates within the economy. B) specific sectors within the economy. C) the retail industry only. D) decisions made by firms.
Which of the following statements correctly describes international trade in accordance with comparative advantage?
a. Trade is impossible unless there exists a purely competitive market for foreign exchange. b. Trade makes all the citizens of the trading countries better off, which is a clear example of a Pareto improvement. c. Trade may well make some citizens in each trading country worse off. d. Trade requires the judicious application by government of tariffs and quotas in order to discourage production according to comparative disadvantage. e. Trade requires that the economies of the trading partners be of roughly equal size (United States versus Andorra just does not work).
If actual inflation differs from expected inflation, what is the slope of the aggregate supply curve?
a. It is horizontal in the short and long run. b. It is vertical in the short and long run. c. It is vertical in the short run and upward sloping in the long run. d. It is upward sloping in the short run and vertical in the long run.