Refer to Figure 11.3. Assume aggregate demand is represented by AD3 and full-employment output is $5.8 trillion. To restore price stability, the AD curve must shift
A. Rightward by $400 billion.
B. Rightward by $800 billion.
C. Leftward by more than $200 billion.
D. Leftward by less than $200 billion.
Answer: C
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According to data on GDP growth between 1980 and 2009, which of the following statements is true?
What will be an ideal response?
In a typical business cycle, what stage immediately follows a peak?
(A) Contraction (B) Expansion (C) Growth (D) Trough
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In the market shown in Exhibit 3-15, the equilibrium price and quantity of good X are:
A. $0.50, 250. B. $2.00, 300. C. $2.00, 100. D. $1.00, 200.
Exhibit 20-3 Money market demand and supply curves
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As shown in Exhibit 20-3, assume the money supply curve shifts rightward from MS1 to MS2 and the economy is operating along the intermediate segment of the aggregate supply curve. The result will be a:
A. higher investment, lower real GDP, and lower price level. B. lower investment, lower real GDP, and lower price level. C. higher investment, higher real GDP, and higher price level. D. higher interest rate and no effect on real GDP or the price level.