An increase in government purchases of $200 billion will shift the aggregate demand curve to the right by
A) less than $200 billion.
B) more than $200 billion.
C) $200 billion.
D) None of the above are correct. This policy shifts the long-run aggregate supply curve.
B
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At macroeconomic equilibrium
A) total taxes equal total transfers. B) total consumption equals total production. C) total investment equals total inventories. D) total spending equals total production.
The relationship between government spending and the price level explains the:
A. upward-sloping aggregate demand curve. B. downward-sloping aggregate demand curve. C. perfect elasticity of the aggregate demand curve. D. None of these is true.
Based on your understanding of the labor market model presented by Blanchard (i.e., the WS and PS relations), explain what types of policies could be implemented to cause a reduction in the natural rate of unemployment
What will be an ideal response?
When a group of workers forms a union, they introduce an element of
A) pure competition into the labor market. B) monopoly into the labor market. C) monopoly into the product market. D) monopsony into the product market.