Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:
A. P4 and Y1.
B. P4 and Y2.
C. P5 and Y1.
D. P5 and Y2.
Answer: D
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The slope of the isocost line:
A) changes as the combination of labor and capital is altered by the firm. B) is equal to the ratio of the marginal productivities at all points along the isocost line. C) is equal to the negative of the ratio of the prices of the outputs. D) is equal to the negative of the ratio of the prices of the inputs.
Perfectly competitive markets are characterized by:
a. a small number of very large producers. b. very strong barriers to entry and exit. c. firms selling a homogeneous product. d. all of these.
The market demand curve represents the total quantity demanded at each price
a. True b. False Indicate whether the statement is true or false
Figure 11-2
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Which graph in Figure 11-2 best reflects a Keynesian’s view of the short-run impact of an increase in the personal income tax rate?
A. 1 B. 2 C. 3 D. 4