Answer the next question based on the following list of items that are related to aggregate demand and/or aggregate supply. 1) Government Spending2) Consumer Expectations3) Degree of Excess Capacity4) Personal Income Tax Rates5) National Income Abroad6) Business Taxes7) Domestic Resource Availability8) Prices of Imported Products9) Profit Expectations on InvestmentsWhich combination of factors best explain why the aggregate supply curve would shift?
A. 1 and 2
B. 2 and 9
C. 6 and 7
D. 3 and 5
Answer: C
You might also like to view...
Dumping is sometimes legal under international trade agreements
Indicate whether the statement is true or false
If the demand for a steak is unit elastic, then
A) the percentage change in quantity demanded is 100 percent greater than the percentage change in price (in absolute value). B) quantity demanded does not respond to changes in price. C) the percentage change in quantity demanded is equal to the percentage change in price. D) the percentage change in quantity demanded is 1 percent greater than the percentage change in price.
Classical economists or modern day monetarists would suggest that the Fed should
a. always lower the discount rate in order to combat recessions b. increase the reserve requirement in order to reduce the threat of inflation c. set the rate of increase in the money supply to be approximately equal to the economy's long-run full-employment rate of growth d. set the rate of increase in the money supply to be approximately equal to the discount rate e. use its tools, such as raising the discount rate, increasing the reserve requirement,and selling securities, in order to bring inflation down to 0 percent
If the government decides to change the level of government spending, what happens to the value of the multiplier?
a. It becomes larger. b. It becomes smaller. c. It does not change. d. It is impossible to predict.