In the model of aggregate demand and aggregate supply, the initial impact of an increase in consumer optimism is to
A. shift long-run aggregate supply to the left.
B. shift aggregate demand to the right.
C. shift short-run aggregate supply to the left.
D. shift short-run aggregate supply to the right.
E. shift aggregate demand to the left.
Answer: B. shift aggregate demand to the right.
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If there is just one producer in an industry where the average total cost curve declines throughout the output range up to where it intersects the industry demand curve: a. the industry will be a natural monopoly
b. charging a price equal to marginal cost would entail economic losses for the producer. c. charging a price equal to average cost would entail a welfare cost. d. All of the above would be true.
The In the News article titled "Great Recession Officially Ended Last Year" came out over a year after the recession was statistically declared over. Which of the following obstacles does this article address?
A. Implementation problems. B. Measurement problems. C. Design problems. D. Goal conflicts.
When OPEC caused the price of oil to rise in the early 1970s, the:
A. aggregate supply curve shifted to the right. B. aggregate supply curve shifted to the left. C. aggregate demand curve shifted to the right. D. aggregate demand curve shifted to the left.
Exhibit 4-6 Demand and supply curves
If market supply decreases and, simultaneously, market demand increases, the new equilibrium will show:
A. market price will decrease, and market quantity exchanged will increase. B. market price will increase, and market quantity exchanged will decrease. C. market price will increase, and the quantity exchanged could increase, decrease, or remain the same. D. market price could increase, decrease, or remain the same, and quantity exchanged will increase.