Refer to the diagram. If the equilibrium price level is P 1 , then:
A. aggregate demand is AD 2 .
B. the equilibrium output level is Q 3 .
C. the equilibrium output level is Q 2 .
D. producers will supply output level Q
D. producers will supply output level Q
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In an unregulated, competitive market consumer surplus exists because some
A) sellers are willing to take a lower price than the equilibrium price. B) consumers are willing to pay more than the equilibrium price. C) sellers will only sell at prices above equilibrium price (or actual price). D) consumers are willing to make purchases only if the price is below the actual price.
If aggregate demand shifts because of a wave of pessimism about stock prices, those who favor a policy that "leans against the wind" would advocate the
a. Federal Reserve increase the money supply or the government increase taxes. b. Federal Reserve increase the money supply or the government decrease taxes. c. Federal Reserve decrease the money supply or the government increase taxes. d. Federal Reserve decrease the money supply or the government decrease taxes.
In an open economy, an increase in the government's budget deficit will ________ the domestic real interest rate and ________ the level of capital investment in the country, holding other factors constant.
A. decrease; decrease B. increase; decrease C. increase; increase D. decrease; increase
For this question, assume that a country experiences a permanent reduction in its saving rate. Which of the following will occur as a result of this reduction in the saving rate?
A) a permanently slower growth rate of output B) no permanent effect on the level of output per capita C) a permanently lower level of output per worker D) both A and B E) both B and C