For a given level of inflation, if a resolution of international disputes leads to a cutback in government military spending, then the ________ shifts ________.
A. short-run aggregate supply line; downward
B. aggregate demand curve; left
C. short-run aggregate supply line; upward
D. aggregate demand curve; right
Answer: B
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The three main monetary policy tools used by the Federal Reserve to manage the money supply are
A) interest rates, tax rates, and government spending. B) open market operations, discount policy, and reserve requirements. C) tax rates, government purchases, and government transfer payments. D) open market operations, the exchange rate of the dollar against foreign currencies, and government purchases.
When the market price is set above the equilibrium price:
A. the market is not efficient. B. total surplus is not maximized. C. consumer surplus is decreased. D. All of these are true.
A natural monopoly is created by
a. a patent b. nature c. substantial economies of scale d. government regulation e. control of scarce inputs
Territorial division among firms in an industry would lead to price and output behavior similar to
A. monopolistic competitors. B. a regional monopoly. C. cutthroat competitors in an oligopolistic market. D. perfect competitors.