Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C
B. B; C
C. B; A
D. D; B
Answer: D
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Of the following views on the effects of immigration on the receiving nation's economic growth, which have NOT been suggested by economists Michael Kremer and Julian Simon?
A) Technological progress is driven by population growth. B) Immigration increases a nation's labor pool and encourages ingenuity. C) Immigration costs the local population jobs and greatly lowers their incomes. D) Immigrants raise the standard of living of a nation's native population.
John has been trying to find a job for the past six months. He went for an interview at Aqua Inc Although his performance was better than that of all the other candidates, the interview board rejected him thinking that they must be missing out on
something about him that other employers have noticed and hence, have not hired him. A(n) ________ has occurred in this case. A) positive externality B) negative externality C) moral hazard D) information cascade
With free entry:
A. there is a known and limited number of potential suppliers that can produce a good in the long run. B. there is an unlimited number of firms that can produce a good in the long run. C. the long run market supply curve is vertical at the market quantity. D. the long run market demand curve is horizontal at the market price.
The average total cost curve and the average variable cost curve grow closer as output increases because
a. the marginal cost of production intersects these curves at their minimum points b. in the long run all costs are variable c. the cost of labor dominates the cost of raw material inputs at high levels of output d. the total variable costs are constant e. the average fixed cost decreases as output increases