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
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Which of the following will cause a decrease in the demand for peanut butter?
a. an increase in the supply of peanut butter b. an increase in the price of peanut butter c. a doubling of the price of bread d. a drought in Georgia that destroyed 30 percent of the peanut crop e. an increase in consumer income
Wilbur's Bean Emporium serves barbeque sandwiches over the lunch hour. The marginal cost of t he 50th barbeque sandwich is $1.50. The average total cost of the 49th sandwich is $1.75. For Wilbur's Bean Emporium, __________ when output is 50 sandwiches.
Fill in the blank(s) with the appropriate word(s).
If firms sell more output than expected, planned investment:
A. equals actual investment. B. equals zero. C. is greater than actual investment. D. is less than actual investment.
An increase in the rate of economic growth is likely to
A. increase the federal budget deficit. B. decrease the federal budget deficit. C. have no effect on the federal budget deficit. D. increase the federal budget deficit only if inflation decreases.