Refer to the graph below. Assume that the economy is in initial equilibrium where AD1 intersects AS1. If there is a decrease in aggregate demand to AD2, then according to mainstream economists, if prices are flexible and wages are not, this will result in an equilibrium at point:
A. B
B. C
C. D
D. E
C. D
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Which is the main motivation for entrepreneurs to take on the risks of producing?
A. Increasing costs of production B. Fun C. Profit D. Decreasing costs of production
A decrease in taxes will have no effect on real GDP if
A) the tax decrease is offset by an increase in government spending. B) people look at changes in taxes only in the present. C) the Ricardian equivalence theorem holds. D) there is no crowding out.
In the model for desired saving, autonomous is roughly synonymous with ________
A) policy-determined B) endogenous C) intended D) inflation-adjusted E) exogenous
If Americans expect the dollar price of the British pound to rise, this expectation will cause
a. a rightward movement along the U.S. demand curve for pounds b. a leftward shift of the U.S. demand curve for pounds c. a rightward shift the U.S. demand curve for pounds d. a leftward movement along the U.S. demand curve for pounds e. no change in the U.S. demand curve for pounds