Which of the following will lead to an increase in aggregate demand?
A. An increase in the price level.
B. An appreciation in the value of the U.S. dollar.
C. An increase in national incomes abroad.
D. A decrease in the price level.
Answer: C
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Half of all your potential customers would pay $10 for your product but the other half would only pay $8 . You cannot tell them apart. Your marginal costs are $4 . If you set the price at $8, the expected profit is:
a. $3 b. $4 c. $5 d. $6
When plotted with the aggregate price level on the vertical axis and output on the horizontal axis, which of the following curves is vertical?
A. SRAS B. AD C. LRAS D. None of the above
According to the new classical school, if macroeconomic policy is perfectly predictable, then the aggregate supply curve and the Phillips curve must be vertical in both the short run and the long run
a. True b. False Indicate whether the statement is true or false
(Last Word) The safest way for an individual to leave a burning theater is to run for the nearest exit; it is therefore also the best means of escape for a large audience. This assertion illustrates the:
A. "after this, therefore because of this" fallacy. B. correlation fallacy. C. fallacy of composition. D. fallacy of limited decisions.