Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C
B. D; B
C. A; B
D. B; C
Answer: B
You might also like to view...
Agreements among competing sellers to maintain a certain minimum price or to divide up the market in a particular way
A) are evidence of a cooperative rather than competitive spirit in business. B) are illegal under federal law where it is applicable. C) benefit business firms and their customers, but at the expense of employees. D) increase the number of job opportunities in the economy.
Which of the following is NOT a protected title vii class?
a. race b. age c. sexual preference d. religion
The purpose of making assumptions in an economic model is to
A) force the model to yield the correct answer. B) minimize the amount of work an economist must do. C) simplify the model while keeping important details. D) express the relationship mathematically.
Combined, local, state, and federal governments in the United States directly employ about ________ percent of all workers.
A. 2 B. 6 C. 14 D. 27