Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C
B. D; B
C. A; B
D. B; C
Answer: B
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Economic profit is always positive when
A. accounting profit is positive. B. accounting profit is zero. C. accounting profit is greater than the firm’s opportunity costs. D. accounting profit is less than the firm’s opportunity costs.
To calculate the time required for real GDP to double, we _____
a. divide the annual growth rate by 72 b. divide 72 by nominal GDP c. divide real output by 72 d. divide 72 by the annual growth rate e. multiply real GDP by 72
Economists believe that free riders often can undermine the social commitment of many in the society, causing voluntary policies to fail.
Answer the following statement true (T) or false (F)
In measuring the stock of money in the U.S., M1 includes
a. traveler's checks. b. savings deposits. c. credit cards d. none of the above.