Refer to the above diagram. An expansionary fiscal policy can best be represented by a:
A. shift in the aggregate demand curve from AD3 to AD2.
B. shift in the aggregate demand curve from AD1 to AD2.
C. movement along the aggregate demand curve.
D. shift in the aggregate demand curve from AD2 to AD1.
Answer: B
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When the Dallas Cowboys decided on Arlington, Texas as the home for their new stadium in 2005, the City of Arlington used eminent domain to acquire property from individuals who were either unwilling to sell or demanded what the city deemed were
unreasonable prices for their property. In this situation, eminent domain A) reduced transactions costs. B) solved the holdout problem. C) accelerated the process of getting the stadium built. D) all of the above
Assume that coal is a normal good. If the price of coal increases and the quantity sold increases, which of the following is consistent with these observations?
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An aggregate supply curve that is always vertical is most consistent with which of the following views of the economy?
A. Monetarist. B. Consensus. C. Keynesian. D. Supply-side.
Suppose that, as expected, aggregate demand in the economy sharply declines. New classical economists say that the price level will _____________ and real output will ____________
A. fall; remain constant B. fall; fall C. remain constant; fall D. remain constant; rise