Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C
B. D; B
C. A; B
D. B; C
Answer: B
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During the financial crisis of 2008, the fall in consumer spending:
A. prompted many firms to increase their output. B. allowed many firms to increase investment spending. C. forced many firms to lay off their workers. D. enabled many firms to increase their prices.
Each nation's International Monetary Fund (IMF) quota subscription is based on
A) its national income. B) its share in world trade. C) its public debt. D) its trade surplus.
Marginal revenue product is defined as the amount that an additional unit of the variable input adds to ____
a. marginal revenue b. total output c. total revenue d. marginal product e. none of the above
If the exchange rate (dollars per unit of foreign currency) has decreased because of a shift of the supply curve, the demand curve, or both, we say there has been a(n)
a. appreciation of the foreign currency b. depreciation of the foreign currency c. revaluation of the foreign currency d. devaluation of the foreign currency e. fixing of the foreign currency