Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2.
B. P3 and Y1.
C. P2 and Y2.
D. P2 and Y3.
Answer: D
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At an equilibrium price for gasoline,
A. everyone who is willing and able to purchase gasoline at that price can do so. B. surpluses are inevitable. C. market forces will eventually change the quantities demanded and supplied. D. suppliers must be using the most efficient oil-drilling equipment available.
The longer the time period considered, the more the elasticity of supply tends to _______.
a. decrease b. remain constant c. increase d. converge to zero
If the price of coffee decreases, the demand curve for tea (a substitute good) will
a. remain unchanged. b. shift to the right. c. shift to the left. d. do none of the above
The temporary tax cuts of 2008 and 2009 were ineffective to boost the economy out of a recession.
Answer the following statement true (T) or false (F)