Refer to the information provided in Figure 27.3 below to answer the question(s) that follow.
Figure 27.3Refer to Figure 27.3. Assume the economy is at Point A. Higher oil prices shift the aggregate supply curve to AS2. If the government decides to counter the effects of higher oil prices by increasing government spending, then the price level will be ________ than P2 and output will be ________ than Y2.
A. greater; less
B. greater; greater
C. less; less
D. less; greater
Answer: B
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Let C = 300 + 0.75y and I = 200. Assume no government or foreign sectors. Investment needs to decrease by ________ to decrease equilibrium output by a total of $750
A) $75 B) $100 C) $150 D) $187.50
A demand curve with unit elasticity can never touch either the vertical or horizontal axes
a. True b. False Indicate whether the statement is true or false
The saying "Money is a veil.". means that
a. while nominal variables are the first thing we may observe about an economy, what's important are the real variables and the forces that determine them. b. money is the principal medium of exchange in most economies. c. the primary determinant of short-run economic fluctuations is not real variables, but rather changes in the money supply. d. in the long run money is of no importance to the determination of either real or nominal variables.
In order for a production possibilities curve to shift to the right, which of the following must occur?
A. government involvement B. increasing consumer wants C. reductions in the supply of resources D. economic growth