Everything else held constant, aggregate demand increases when
A) taxes are cut.
B) government spending is reduced.
C) animal spirits decrease.
D) the money supply is reduced.
A
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Use the following figure to answer the next question.
In the figure, AD2 and AS2 represent the original aggregate supply and demand curves. If Q3 is full-employment output, then AD2 and AS1 best represent a period of ________.
A. hyperinflation B. expansion C. low unemployment D. stagflation
Ali's Gyros operates near a college campus. Ali has been selling 120 gyros a day at $4.50 each and is considering a price cut. He estimates that he would be able to sell 200 gyros per day at $3.50 each
a. Calculate the price elasticity of demand using the midpoint formula. b. Calculate the change in revenue as a result of the price cut.
During recessions, the unemployment rate ________ and output ________
A) rises; falls B) rises; rises C) falls; rises D) falls; falls
A market could function under competition in the situation of Figure 3.1 if demand is at the level of DD
Indicate whether the statement is true or false