Refer to the information provided in Figure 25.1 below to answer the question(s) that follow.
Figure 25.1Refer to Figure 25.1. The movement from A to B could be caused by
A. a decrease in nominal income.
B. an increase in the price level.
C. a decrease in the interest rate.
D. an increase in the interest rate.
Answer: C
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
The relationship between consumer spending and income is known as the
A) rate of individual wealth. B) consumption function. C) rate of income. D) inflation rate.
Entry of new firms into an existing market causes:
A) an upward movement along the market supply curve. B) a downward movement along the market supply curve. C) a rightward shift of the market supply curve. D) a leftward shift of the market supply curve.
A supply curve slopes upward because quantity supplied is higher when price is higher
a. True b. False Indicate whether the statement is true or false