The short-run and long-run aggregate supply curves remain stable, and a decrease in aggregate demand occurs. What is the result in the short run?
A) A period of recession and a rise in the unemployment rate could occur.
B) A period of expansion and a rise in the unemployment rate could occur.
C) An increase in the price level and real GDP will occur.
D) The price level will fall but real GDP will remain the same.
A
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A game in which each player has a dominant strategy of defecting, and each ends up worse off than if they had both cooperated is called
A) a pure coordination game. B) a prisoner's dilemma game. C) an assurance game. D) a battle of the sexes game.
To be a natural monopoly a firm must
A) have significant network externalities. B) control a key resource input. C) have economies of scale that are so large that it can supply the entire market at a lower cost than two or more firms. D) be in a government-regulated market.
A sale of bonds by the Fed generates
A) an increase in the demand for money balances. B) a decrease in the demand for money balances. C) an increase in the demand for bonds and a rise in bond prices. D) an increase in the supply of bonds and a fall in bond prices.
Cary increases the price of her cakes from $8 to $10 per cake, but her cash receipts decrease by 2 percent. The price elasticity of demand (in the $8 to $10 range) is
a. elastic. b. inelastic. c. 0.02. d. 0.25.