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

Economics

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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.

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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.

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Discuss the determinants of the equilibrium interest rate. What can the Fed do to change the interest rate?

What will be an ideal response?

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Saving equals

A. consumption spending minus savings. B. disposable income minus savings. C. disposable income minus consumption spending. D. disposable income minus taxes.

Economics