The federal government increases spending by $50 billion, and the main effect is an increase in the price level. It must be true that the economy is operating on the
A. horizontal portion of the aggregate demand curve.
B. horizontal portion of the aggregate supply curve.
C. vertical portion of the aggregate supply curve.
D. vertical portion of the aggregate demand curve.
Answer: C
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Refer to the figure above. If the engineer spends his entire time producing computer programs, how many computer programs can he produce?
A) 12 B) 30 C) 45 D) 50
Katz, Goborg, and Rimmet are oligopolists in the tractor industry. They face intense pressure from foreign tractor imports. Which of the following actions could be considered collusive?
a. Goborg and Rimmet collaborate on a pricing strategy to boost their sales. b. Katz hires lobbyists to convince the government to raise tariffs on imported tractors. c. Rimmet and Goborg each lower their prices after Katz lowers its prices. d. Goborg deliberately lowers its prices to try to steal customers from Rimmet and Katz.
In an economy at full employment, a presidential candidate proposes cutting the government debt in half in four years by increasing income tax rates and reducing government expenditures. According to Keynesian theory, implementation of these policies is most likely to increase
A) unemployment B) consumer prices C) aggregate demand D) aggregate supply E) the rate of economic growth
Smith and Jones comprise a two-person economy. Their hourly rates of production are shown below. CalculatorsPer HourComputersPer HourSmith10010Jones1206
A. consumption possibilities curve. B. production function. C. supply curve. D. production possibilities curve.