All these curves are U-shaped except
a. Average fixed cost curve
b. Marginal cost curve
c. Average variable cost curve
d. Average total cost
a
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Refer to the following graph.
A price ceiling would be binding, resulting in a market shortage if it is set at:
A. either $3.00 or $1.50. B. $2.25. C. $3.00. D. $1.50.
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y2. C. P3 and Y1. D. P2 and Y3.
Assume the CPI increases from 110 to 121, and Manny's nominal income increases from $100,000 to $120,000 over the same period. Manny's real income has
A. Decreased by approximately 8 percent. B. Increased by approximately 12 percent. C. Remained the same. D. Increased by approximately 9 percent.
Use the following graphs to answer the next question.
In the graphs, the numbers in parentheses near the AD1, AD2, and AD3 labels indicate the level of investment spending associated with each curve, respectively. All numbers are in billions of dollars. The interest rate and the level of investment spending in the economy are at point D on the investment demand curve. To achieve the long-run goal of a noninflationary full-employment output of Qf in the economy, the Fed should try to ________.
A. increase aggregate demand by decreasing the interest rate from 4% to 2% B. decrease aggregate demand by increasing the interest rate from 2% to 4% C. decrease aggregate demand by increasing the interest rate from 4% to 6% D. increase the level of investment spending from $120 billion to $150 billion