An economy in which output has decreased and prices have decreased would suggest a:
A. decrease in short-run aggregate supply.
B. increase in aggregate demand.
C. increase in short-run aggregate supply.
D. decrease in aggregate demand.
Answer: D
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In the long-run, the firm can only expand output by adding more variable inputs (workers and raw materials)
a. True b. False Indicate whether the statement is true or false
According to real business cycle theorists
a. technology creates unemployment by displacing labor and this can spark the beginning of an economy's downturn b. firms that don't adopt the new, available technology cannot compete with firms that do and end up being driven out of business c. business cycles are inevitable because technological change is inevitable d. technology displaces labor, which reduces labor productivity which causes prices, profit, and GDP to fall e. technology displaces labor, increases labor productivity, and raises prices and profit, which stimulates firms to create even more technology
Suppose a tax is imposed on bananas. In which of the following cases will the tax cause the equilibrium quantity of bananas to shrink by the largest amount?
a. The response of buyers to a change in the price of bananas is strong, and the response of sellers to a change in the price of bananas is weak. b. The response of sellers to a change in the price of bananas is strong, and the response of buyers to a change in the price of bananas is weak. c. The response of buyers and sellers to a change in the price of bananas is strong. d. The response of buyers and sellers to a change in the price of bananas is weak.
Which of the following are the constituents of the Balance of Payments?
(a) Current account, primary account and general balance. (b) Current account, capital account and financial account. (c) Trade account, merchandise account and overdrafts. (d) Financial account, income tax and VAT.