Refer to the above diagram. When AD1 shifts to AD2, then at P1Q3 output demanded will:
A. equal output supplied.
B. be less than output supplied.
C. exceed output supplied.
D. be at stable full-employment GDP.
Answer: C
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The shoe leather costs of inflation include all of the following except:
A. the cost of more frequent trips to the bank. B. the installation of a new cash management system. C. the extra costs incurred to avoid holding cash. D. the lost purchasing power of cash.
In which year did the United States account for half the world's manufacturing output?
A. 1925 B. 1945 C. 1965 D. 1985
In the Heckscher-Ohlin model, when two countries begin to trade with each other
A) the relative prices of traded goods in the two countries converge. B) relative factor prices in the two countries diverge. C) benefits from trade are evenly distributed between the two countries. D) all factors in both countries will gain from trade. E) all factors in one country will gain, but there may be no gains in the other country.
On efficiency grounds, corrective taxes should not be given as compensation to those individuals harmed by negative externalities
a. True b. False