A decrease in the price level in an economy will _____
a. shift the aggregate expenditure line upward
b. shift the aggregate expenditure line downward
c. cause an upward movement along the aggregate expenditure line
d. cause a downward movement along the aggregate expenditure line
e. shift the aggregate demand curve leftward
a
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Refer to the accompanying figure. This economy would be operating at point B if:
A. the opportunity cost of making milk were higher than the opportunity cost of making movies. B. the opportunity cost of making movies were higher than the opportunity cost of making milk. C. it was operating efficiently. D. resources that are better-suited to making movies were being used to make milk, while resources that are better-suited to making milk were being used to make movies.
If a nation starts out with very little capital
A. it is doomed to eternal poverty because it will not be able to divert productive resources from producing consumer goods to producing capital goods. B. it can quite easily divert some resources from producing consumer goods to producing capital goods. C. if it possesses a valuable commodity that the industrial world wants such as oil, it can sell its oil in exchange for plant and equipment and thus industrialize. D. None of the choices are true.
An inferior good is one that
a. people consume if their income falls b. people consume more of if their income falls c. people never consume d. people consume if their income rises e. people consume more of if their income rises
Unlike consumption, which is fairly stable over time, investment is subject to erratic fluctuations
Indicate whether the statement is true or false