Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the long run would be:
A. P2 and Y2.
B. P1 and Y2.
C. P4 and Y2.
D. P1 and Y1.
Answer: B
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If the number of companies producing memory chips increases, then the
A) quantity of memory chips supplied increases. B) supply of memory chips does not change. C) supply of memory chips decreases. D) demand for memory chips increases. E) supply of memory chips increases.
The LM curve
A) is horizontal. B) is vertical. C) slopes downward. D) slopes upward.
We can say that a contract is able to prevent moral hazard when
A) it eliminates production inefficiencies due to moral hazard without shifting risk to risk-averse people. B) it eliminates production inefficiencies due to moral hazard without shifting risk to risk-loving people. C) it shifts risk to risk-loving people. D) it eliminates production inefficiencies due to moral hazard and shifts risk to risk-averse people.
If a variable other than the price level changes, the AD curve shifts
a. True b. False