Use the following graph, which shows the aggregate demand and aggregate supply schedule for a hypothetical economy, to answer the next question.Real Domestic Output Demanded (in billions)Price Level (index value)Real Domestic Output Supplied (in billions)$500350$3,5001,0003003,0001,5002502,5002,0002002,0002,5001501,5003,0001001,000If the quantity of real domestic output demanded decreased by $500 and the quantity of real domestic output supplied increased by $500 at each price level, the new equilibrium price level and quantity of real domestic output would be ________.
A. 250 and $2,000
B. 200 and $2,000
C. 150 and $1,500
D. 150 and $2,000
Answer: D
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The above figure shows the production possibility frontier for a country. What is the opportunity cost per ton of rice to move from point B to point D?
A) 500 bottles of wine B) 2 bottles of wine C) 1/2 of a bottle of wine D) 1000 bottles of wine E) None of the above answers is correct.
While many analysts defended the actions taken by the Fed and the Treasury to respond to the financial crisis in 2008, others were critical of these actions. The critics were concerned that by not allowing large firms to fail,
A) stockholders and bondholders of these firms were not allowed to receive the proceeds from the sale of assets that would have occurred if the firms had declared bankruptcy. B) there will be less competition in the U.S. economy, which could led to higher prices for consumers. C) smaller firms will resent not receiving similar assistance. D) there is an increased likelihood that other firms will engage in risky behavior in the future with the expectation that they will also not be allowed to fail.
Refer to the information above. What is the level of unintended inventory investment when income is 850?
A) -175 B) 175 C) -200 D) 200
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y2. C. P3 and Y1. D. P2 and Y3.