Refer to the above figure. Suppose the current aggregate demand is represented by AD2. If aggregate demand falls to line AD3, then
A) the new equilibrium will be at j.
B) the new equilibrium will be at k.
C) the new equilibrium real Gross Domestic Product (GDP) will be x.
D) a new price level will be established at a.
C
You might also like to view...
If the money wage rate rises and potential GDP remains the same, does the LAS curve or the SAS curve shift or is there a movement along the LAS curve or the SAS curve?
What will be an ideal response?
A country's balance of payments shows a
A) detailed record of the import and export of services for the country. B) detailed record of the country's imports. C) summary record of international financial assistance received by the country. D) summary record of a country's economic transactions with foreign residents and governments over a year.
The intangible costs associated with reduced quality of life include
a. Pain and suffering b. Lost productivity at work c. The cost of home remodeling to accommodate a physical handicap d. Potential income lost due to premature death e. All of the above are intangible costs
Which of the following CANNOT be true at any output along a perfectly competitive firm's short-run supply curve?
A. Marginal cost is greater than average total cost. B. Marginal cost is greater than average variable cost. C. Average variable cost is greater than marginal cost. D. Average total cost is greater than marginal cost.