Suppose our economy is in macroeconomic equilibrium with an upward-sloping aggregate supply curve and a downward-sloping aggregate demand curve. An increase in aggregate demand will

A. increase aggregate supply.
B. decrease the price level.
C. cause the aggregate supply curve to shift to the right.
D. increase real GDP.


D. increase real GDP.

Economics

You might also like to view...

Explain how positive externalities cause a wedge between private marginal costs and social marginal costs. Give an example of a positive externality and explain why it is, in fact, a positive externality. Draw a supply/demand diagram and add a social marginal cost curve that represents the presence of the positive externality. Explain the relationship between the equilibrium quantity and that which is socially efficient.

What will be an ideal response?

Economics

A factor of production that cannot be easily changed in the relevant time period is called a

A) short-run factor. B) fixed input. C) variable input. D) production anchor.

Economics

Output for a simple production process is given by Q = 2KL, where K denotes capital, and L denotes labor. The price of capital is $25 per unit and capital is fixed at 8 units in the short run. The price of labor is $5 per unit. What is the total fixed cost of producing 80 units of output?

A. $25 B. $200 C. $33 D. $85

Economics

Canada and the United States produce computers and chemicals using labor and capital as the only inputs in production. The United States is capital abundant, and Canada is labor abundant. Computer production is more labor intensive than chemical production in both countries. What does the HeckscherOhlin model predict will happen to prices of computers or chemicals in the two countries?

a. The price of chemicals should rise in the United States. b. The price of chemicals should fall in the United States. c. The price of computers should fall in Canada. d. The price of chemicals should rise in Canada.

Economics