Use the following graph, which shows an aggregate demand, to answer the next question.
If the economy is at point C and the price level increases by 100, then the real balances, interest-rate, and foreign purchases effects will ________.
A. shift the AD curve to the left
B. move the economy to point A
C. move the economy to point B
D. move the economy to point D
Answer: B
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According to the traditional Keynesian analysis, if the government increases spending and pays for all of it by raising current taxes, then
A. aggregate demand will increase. B. a budget deficit will occur. C. aggregate demand will decrease. D. a budget surplus will occur.
As you move up along a straight-line demand curve,
A) the price elasticity of demand decreases in size. B) the price elasticity of demand increases in size. C) total revenue always decreases. D) total revenue always increases. E) total revenue never changes.
Technological unemployment is a macroeconomic phenomenon that occurs when
A) unemployment changes due to the effects of technology in high-technology industries. B) unemployment changes due to the effects of monetary and fiscal policy in the New Economy. C) hysterisis. D) Eurosclerosis. E) unemployment changes as a result of technological change.
Farm support programs most often take the form of price floors, which cause excess demand.
Answer the following statement true (T) or false (F)