Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be:

A. P1 and Y2.
B. P2 and Y3.
C. P3 and Y1.
D. P2 and Y2.


Answer: B

Economics

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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.

A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower

Economics

If there are five firms in an industry, each with a market share of 20 percent, the Herfindahl-Hirschman Index (HHI) of concentration is

A) 2000. B) 400. C) 100. D) 20.

Economics

The price system is constantly sending __________ and ___________ thousands of signals.

Fill in the blank(s) with the appropriate word(s).

Economics

Exhibit 2 shows that before trade, the producer surplus equaled ______; after trade, the producer surplus ______.


a. a + b + c; expands to a + b + c + d
b. d; expands to b + c + d
c. e + f; expands to b + c + d + e + f
d. a + b + c; expands to a + b + c + e + f

Economics