Which of the following will most likely occur in the short run when the long-run equilibrium of an economy is disturbed by an unanticipated decrease in aggregate demand?
a. a decrease in output and a higher price level
b. an increase in output and a higher price level
c. a decrease in output and a lower price level
d. an increase in output while prices remain unchanged
C
You might also like to view...
The production possibilities frontier shifts as
A) tastes and preferences change. B) the money supply grows or shrinks. C) technology changes. D) the unemployment rate changes.
Oil found underground in Texas is an example of:
a. labor. b. land or a natural resource. c. an entrepreneur. d. human capital. e. capital resource.
Which of the following explains why higher prices in the goods and services market will lead to an upward sloping short-run aggregate supply curve?
a. The higher prices will temporarily improve profit margins because many of the cost components of firms will be fixed in the short run. b. The higher prices will reduce the purchasing power of the fixed quantity of money and, thereby, stimulate additional output. c. The higher prices will expand the economy's resource base and, thereby, stimulate additional output. d. The higher prices will improve technology and, thereby, stimulate additional output.
Answer the following statement(s) true (T) or false (F)
1. International trade is more important in some countries than it is in others. 2. Transportation is among the leading U.S. export sectors. 3. U.S. exports and imports have been declining since the mid-twentieth century. 4. Most of the early international trading partners of the United States were5. Neither Canada nor Mexico is among the leading U.S. international trading partners. in Europe.