In the Keynesian cross diagram, a decline in autonomous consumer expenditure causes the aggregate demand function to shift down, the equilibrium level of aggregate output to ________, and the IS curve to shift to the ________,
everything else held constant.
A) rise; left
B) rise; right
C) fall; left
D) fall; right
C
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Assume Mimi's budget constraint is shown in the graph shown. If earrings cost $7, then hairbands must cost:
A. $3.50.
B. $7.
C. $5.25.
D. $4.
If consumers are loyal to the products of an existing firm, this loyalty may
a. reduce the incentives for the firm to invest b. result in more responsive management and better quality products c. reduce the demand for imported goods d. serve as a barrier to new entry into the market e. force the firm to produce at higher costs
A demand shock that increases real GDP above its full-employment level will, in the long run,
a. lead to a higher wage rate and an upward shift of the aggregate supply curve b. lead to a lower wage rate and a downward shift of the aggregate supply curve c. lead to a higher wage rate and a rightward shift of the aggregate demand curve d. lead to a lower wage rate and a leftward shift of the aggregate demand curve e. cause no further shifts in the aggregate supply or aggregate demand curve
The price of movie tickets in a town has risen from $7 to $9. What is the most likely effect of the change in price?
a) The demand curve for movie tickets will move right b) The quantity demanded of movie tickets will increase c) The demand curve for movie tickets will move left d) The quantity demanded of movie tickets will decreade