A negative shock in aggregate demand will likely result in no permanent change in ________
A) output
B) the equilibrium inflation rate if the central bank responds by lowering interest rates
C) aggregate demand, if the central bank responds by lowering interest rates
D) all of the above
E) none of the above
D
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When the velocity of circulation equals 4 in 2010, this fact means that
A) consumers held four dollars in wealth for each dollar they spent in 2010. B) on average, each dollar of money in the economy purchased four dollars of goods and services in GDP in 2010. C) for each additional dollar of money injected into the economy, the price level rose 4 percent in 2010. D) real output of goods and services in GDP rose by four dollars for each additional dollar of money consumers saved.
Technological innovations will cause
a. production to increase but the production possibilities curve to remain unchanged b. the production possibilities curve to shift to the left c. the production possibilities curve to shift to the right d. an economy to operate within its production possibilities curve e. production at a point above or exterior to the production possibilities curve
Which of the following is correct?
a. Monetarists believe there is a direct link between changes in a nation's money supply and changes in expenditures. b. Monetarists believe there is no short-term link between changes in a nation's money supply and changes in expenditures. c. Keynesians believe there is no short-term link between changes in a nation's money supply and changes in expenditures. d. Keynesians believe there is a direct link between changes in a nation's money supply and changes in expenditures. e. None of the above.
Exhibit 7-16 Long-run average cost curves
In Exhibit 7-16, which firm's long-run average cost curve experiences constant returns to scale between 2 and 5 units?
A. Firm A. B. Firm B. C. Firm C. D. Firms A and C.