Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the long run would be:
A. P2 and Y2.
B. P1 and Y2.
C. P4 and Y2.
D. P1 and Y1.
Answer: B
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Which of the following increases the demand for a good or service?
A) a fall in the price of the good or service B) a smaller number of consumers wanting to buy the good or service C) a rise in the price of the good or service D) a rise in the price of a substitute good or service E) a rise in the price of a complement
A monopolist's cost curves may shift down because
a. large-scale input purchases may permit the monopolist to take quantity discounts. b. of advertising expenditure. c. competitors are pushed out of the market. d. of bureaucratic inefficiencies.
Suppose there are two countries (country A and country B) each with its own currency (Currency A and Currency B). Suppose the exchange rate is expressed in terms of amount of Currency A needed to get Currency B. A weakening of Currency A would show up as
A. an increase in the interest rate. B. a decrease in the exchange rate. C. a decrease in the interest rate. D. an increase in the exchange rate.
Requiring a home buyer to have a large down payment reduces the risk to a mortgage lender because:
A. it means there is more information available on the buyer. B. the buyer is less likely to sell the house. C. it means the buyer likely underpaid when she bought the house. D. it means that if the price of the house falls, the owner suffers the loss.