Because of the slope(s) of the ________, we can say that a decrease in the price level leads to a higher level of real GDP demanded
A) aggregate demand curve
B) short-run aggregate supply curve
C) long-run aggregate supply curve
D) short-run and long-run aggregate supply curves
Answer: A
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Assume that the full-employment level of output is $1,000 and the price level associated with full-employment output is 100. Also assume that the economy's current level of output is $1,100 and, at the price level of 100, current aggregate demand is $1,200. If the government wants to move the economy back to the full-employment level of output and the MPC is 0.75, then it should
A. reduce government purchases by $100. B. reduce government purchases by $200. C. reduce government purchases by $50. D. reduce government purchases by $25.
Complete price stability would be the result of
A) inflation. B) an inflation rate of zero. C) deflation. D) hyperinflation.
In the standard consumption function of C = a + bY, a change in corporate stock prices would be reflected by a change in
A) Y. B) b. C) a. D) both A and B.
If a U.S. citizen buys a dress made in Nepal by a Nepalese firm, then
a. U.S. consumption increases, U.S. net exports decrease, and U.S. GDP decreases. b. U.S. consumption increases, U.S. net exports decrease, and U.S. GDP is unaffected. c. U.S. consumption decreases, U.S. net exports increase, and U.S. GDP increases. d. U.S. consumption decreases, U.S. net exports increase, and U.S. GDP is unaffected.