Figure 5-2
?
In Figure 5-2, an increase in government spending would cause
A. an outward shift in the aggregate supply curve and an increase in the price level.
B. an outward shift in the aggregate demand curve and an increase in the price level.
C. an inward shift of the aggregate demand curve and an increase in the price level.
D. an inward shift of the aggregate demand curve and a decrease in the price level.
Answer: B
You might also like to view...
Which of the following statements is correct?
a. NASDAQ is an important stock exchange in the United States. b. The demand for a corporation's stock is largely based on people's perception of the corporation's profitability in the future. c. Compared to the Standard & Poor's 500 Index, the Dow Jones Industrial Average incorporates the stock prices of a much smaller number of corporations. d. All of the above are correct.
The circular flow model illustrates the crucially important idea of macroeconomics, which is that:
A. only two markets exist in every economy-input and output. B. income is lower when there is more spending on goods and services. C. every expenditure of someone in the economy is exactly equal to the income of another. D. the flow of two things in the economy-"stuff" and "money"-travel in the same direction.
A cut in government spending, a decrease in income abroad, an increase in taxes, or an expectation that future consumer income will fall will all cause aggregate:
A. demand to shift rightward. B. demand to shift leftward. C. supply to shift rightward. D. supply to shift leftward.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, a decrease in unemployment may be represented by the movement from
A. B to A. B. C to D. C. B to D. D. A to C.