If we observe an increase in real GDP and an increase in the price level after an increase in aggregate demand, we can conclude that
A) the aggregate supply curve is upward sloping.
B) the aggregate supply curve is horizontal.
C) the aggregate supply curve is vertical.
D) the economy is now at full employment.
A
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As disposable income decreases, consumption
A. and saving both increase. B. decreases and saving increases. C. and saving both decrease. D. increases and saving decreases.
A good way to view macroeconomic equilibrium is:
a. Water at rest in a tub. b. Two opposing forces, like water flowing into and out of a tub but the level remaining constant. c. A state of complete rest, where an economy comes to a complete halt for a brief period. d. A state of rapid change, but one where the adjustment from one level to another is so quick that the shifts are seamless to most observers. e. Where the supply and demand for economic activity equals the supply and demand for political activity.
The ________ approach relies on the right discretionary policy to close the gap through a ________ of the aggregate demand curve
a. passive; decrease b. active; increase c. passive; increase d. active; decrease
As the price of good X rises, the demand for good Y falls. Therefore, goods X and Y are
A) substitutes. B) normal goods. C) complements. D) inferior goods. E) none of the above