According to the classical theory, an inward shift in aggregate demand would reduce
A. the price level but increase real Gross Domestic Product (GDP).
B. real income but have no impact on the price Gross Domestic Product (GDP).
C. real Gross Domestic Product (GDP) and the price level.
D. the price level but have no effect on real Gross Domestic Product (GDP).
Answer: D
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A demand curve that is horizontal indicates that the commodity
A) has few substitutes. B) must be very cheap. C) has a large number of substitutes. D) is a necessity.
Refer to Figure 3-4. If the price is $25
A) there is a shortage of 300 units. B) there is a shortage of 200 units. C) there is a surplus of 200 units. D) there is a surplus of 300 units.
What is a positive externality?
What will be an ideal response?
In 2007 a company sold 35,000 drones at $150 each. In 2008 the same company sold 40,000 drones at $170 each. This information suggests that
A. The price of drones increased because the costs of production increased from 2007 to 2008. B. From 2007 to 2008, the demand curve for drones was upward-sloping because of improved technology. C. The supply of drones increased from 2007 to 2008. D. The demand for drones increased from 2007 to 2008.