Assume that the aggregate demand increases while the short-run aggregate supply decreases. The result is a(n):
a. increase in both equilibrium real GDP and the price level.
b. decrease in equilibrium real GDP and an increase in the price level.
c. decrease in both equilibrium real GDP and the price level.
d. decrease in equilibrium real GDP, while the price level remains fixed.
e. increase in the price level, while the change in equilibrium real GDP is ambiguous.
e
You might also like to view...
According to the above table, the marginal propensity to consume is
A) 0.8. B) 0.75. C) 0.5. D) 0.6.
A firm charging prices below marginal cost is said to be engaged in
A) price fixing. B) predatory pricing. C) a cartel. D) irrational behavior.
Which one of the following people is not a member of the labor force?
a. A full-time student who devotes all her time to her classes. b. A person who works 30 hours a week at Burger King and goes to school at night. c. The man who was fired last week and is searching for a new job. d. The President of the United States. e. A professional athlete.
Since the 1950s, total private sector expenditures in the United States fell by half to 50 percent of GDP
a. True b. False Indicate whether the statement is true or false