]Which of the following would not cause the AD curve to shift?
a. A change in the money supply
b. The public's expectations of a fall in the interest rate
c. A change in aggregate expenditure caused by a change in the price level
d. A change in fiscal policy
e. A change in autonomous consumption spending
C
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U.S. Financial Crisis. Suppose that foreigners had reduced confidence in U.S. financial institutions and believed that privately issued U.S. bonds were more likely to be defaulted on.
a. rise which by itself would increase aggregate demand. b. rise which by itself would decrease aggregate demand. c. fall which by itself would increase aggregate demand.
Table 1.2 shows the hypothetical trade-off between different combinations of Stealth bombers and B-1 bombers that might be produced in a year with the limited U.S. capacity, ceteris paribus.Table 1.2Production Possibilities for BombersCombinationNumber of B-1 BombersOpportunity cost(Foregone Stealth)Number of Stealth BombersOpportunity cost (Foregone B-1)A20NA195 B35 180 C45 150 D50 100NAOn the basis of Table 1.2, what is gained by producing at point B rather than point A?
A. 195 Stealth bombers. B. 35 B-1 bombers. C. 15 B-1 bombers. D. 15 Stealth bombers.
Regulators employ average cost pricing instead of marginal cost pricing because
A) average cost pricing is more efficient than marginal cost pricing. B) price must be high enough to cover all opportunity costs if the firm is to stay in business. C) the price is lower with average cost pricing. D) average cost pricing is simpler to compute than marginal cost pricing.
Free trade allows the people of a country to produce outside their production possibility frontier.
Answer the following statement true (T) or false (F)