The United States' involvement in World War II caused
a. both the aggregate demand curve and aggregate supply curve to shift outward, causing GDP to increase and the price level to decrease
b. both the aggregate demand curve and aggregate supply curve to shift inward, causing GDP to increase and the price level to decrease
c. the aggregate demand curve to shift inward and the aggregate supply curve to shift outward, causing both GDP and the price level to increase
d. the aggregate demand curve to shift outward and the aggregate supply curve to shift inward, causing both GDP and the price level to increase
e. aggregate demand to initially shift out, then reverse, leaving the economy at equilibrium
D
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
In determining the beginning of recessions, the NBER Business Cycle Dating Committee looks for evidence of decline in:
A. the rate of inflation. B. specific sectors of the economy. C. the stock market. D. the entire economy.
People are especially prone to undervaluing opportunity costs when
A. they are nonmonetary, such as time. B. they involve obvious costs, like lost wages. C. All of these are true. D. they are monetary.
In the long run:
A. all costs are variable costs. B. all costs are fixed costs. C. fixed costs are greater than variable costs. D. variable costs equal fixed costs.