An increase in the U.S. price level causes a
A. movement down the U.S. aggregate demand curve.
B. shift of the U.S. aggregate demand curve to the right.
C. movement up the U.S. aggregate demand curve.
D. shift of the U.S. aggregate demand curve to the left.
Answer: C
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Which of the following is NOT an alleged "unrealistic" assumption that proponents of behavioral economics suggest are commonly utilized in traditional economic models based on the rationality assumption?
A) unbounded selfishness B) unbounded rationality C) unbounded will power D) unbounded resources
After an adverse supply shock occurs, the ____________ curve shifts _____________ resulting in a(n) _________________ in the price level and a(n) ________________ in Real GDP
A) AD; leftward; decrease; decrease B) AD; rightward; increase; increase C) SRAS; rightward; decrease; increase D) SRAS; leftward; increase; decrease
If the demand for olives falls when the price of cheese falls, then we know that cheese and olives are:
A. substitutes B. inferior goods C. complements D. normal goods
Public sector investment projects are economically justifiable only when:
a. the discounted social benefits exceed the discounted social costs b. the internal rate of return exceeds the social discount rate c. the benefit-cost ratio exceeds zero d. a and b only e. a, b, and c