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
You might also like to view...
Steve is finding it impossible to get over his most recent break-up and finds himself talking about her constantly. An example of a commitment device that Steve could use to get over her would be:
A. to allow Steve's best friend to punch him in the arm any time he mentions her name. B. to take a cold shower every morning. C. to start dating someone else. D. None of these is a commitment device.
If, in response to a growing demand for food, farmers create productive acreage by draining swamps,
a. the supply curve of land will be vertical b. these new acres will generate the largest rents of all acreages c. the MRP of land will increase d. all land will earn zero rents because of competition e. differential land rents will result
Two of the three pillars of labor productivity growth responsible for the changes in the United States after 1995 are technological change and
a. labor force improvement. b. labor force growth. c. capital formation. d. consumption growth.
The essence of an oligopolistic market is that there are only a few sellers
a. True b. False Indicate whether the statement is true or false