A decline in household income that sets off a multiplier process causes
A. An increase in AD.
B. A decrease in AS.
C. A decrease in AD.
D. An increase in AS.
Answer: C
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What is the main difference between monopolistic competition and monopolies?
What will be an ideal response?
According to the Latin phrase ceteris paribus:
a) Nothing else changes. b) Things do not remain equal. c) Resources are limited. d) There is no government intervention.
The standard supply/demand framework:
A. can be modified to explain real-world events. B. explains real-world events with no need for modification. C. should not be modified to explain real-world events. D. cannot be modified to explain real-world events.
Suppose the economy currently has some underutilized resources. The Fed engages in expansionary monetary policy. The impact of expansionary monetary policy will be to
A. increase short-run aggregate supply, decrease prices and increase real GDP. B. increase aggregate demand, increase prices and increase real GDP. C. increase short-run aggregate supply, decrease in prices and decrease in real GDP. D. increase aggregate demand, increase prices and decrease real GDP.