If a country is experiencing a civil war among its people and therefore cannot afford to improve its infrastructure (thereby inhibiting exports), it will impact its economy by
A. increasing aggregate supply.
B. decreasing aggregate supply.
C. decreasing aggregate demand.
D. increasing aggregate demand.
Answer: C
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If the aggregate demand curve shifts to the right in the short run then the long-run equilibrium will be at a:
A. higher price level and higher level of output. B. higher price level and lower level of output. C. higher price level and same level of output. D. lower price level and higher level of output.
When a tax is placed on the buyers of tennis racquets, the size of the tennis racquet market
a. and the price paid by buyers both decrease. b. decreases, but the price paid by buyers increases. c. increases, but the price paid by buyers decreases. d. and the price paid by buyers both increase.
When real GDP is lower than potential GDP, the output gap is
A. infinity. B. negative. C. zero. D. positive.
Congress commissioned a study to determine what the poverty level or minimum level for subsistence should be for the U.S. population. What branch of economics does this represent?
A) Normative economics B) Positive economics C) Microeconomics D) Macroeconomics