Assume equilibrium real GDP per year is equal to full-employment real GDP. If aggregate demand falls, then
A) the price level will increase in the short run and decrease in the long run.
B) long-run aggregate supply will eventually decrease too.
C) there will be an expansionary ga
D
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
A country's leadership believes that the neoclassical growth theory is correct. The country already has the necessary preconditions for growth, so suggest policy changes the government might enact to help speed economic growth
What will be an ideal response?
The ______ the Lorenz curve is from/to the line of perfect equality, the _____ is the Gini coefficient, and the __________ income equality exists.
A. farther; higher; less B. farther; higher; more C. closer; higher; less D. closer; lower; less
The textbook suggests that traffic congestion is a "negative externality" because
What will be an ideal response?