Within the AD/AS model, an increase in capital formation that permits the economy to achieve a larger output will
a. increase long-run aggregate supply.
b. increase short-run aggregate supply, but long-run aggregate supply will be unaffected.
c. increase aggregate demand.
d. decrease aggregate demand.
A
You might also like to view...
The above figure shows the market demand curve for telecommunication while driving one's car (time spent on the car phone). The current price is $0.35 per minute. If the price were to increase by ten cents per minute, consumer surplus would
A) fall to $820. B) fall by $84. C) fall by $58. D) fall to $369.
Japan and China can both produce guns and rice. The country with the lowest opportunity cost of guns (in terms of rice) will
A. import guns. B. have a comparative advantage in guns. C. have an absolute advantage in guns. D. have a comparative advantage in rice.
Discuss the determinants of the equilibrium interest rate. What can the Fed do to change the interest rate?
What will be an ideal response?
Saving equals
A. consumption spending minus savings. B. disposable income minus savings. C. disposable income minus consumption spending. D. disposable income minus taxes.