According to classical theory, a shift in aggregate demand will affect
A. the price level only.
B. both real Gross Domestic Product (GDP) and the level of employment.
C. real Gross Domestic Product (GDP) only.
D. the level of employment only.
Answer: A
You might also like to view...
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
Which of the following was NOT a time period in which output in the U.S. sharply rose?
A. World War I B. the Roaring Twenties C. the early 1930s D. the 1960s E. the late 1990s
Refer to Table 2-5. What is Finland's opportunity cost of producing one cell phone?
A) 0.25 board feet of lumber B) 4 board feet of lumber C) 12 board feet of lumber D) 16 board feet of lumber
If a profit-maximizing firm finds that price exceeds average variable cost and marginal cost is greater than marginal revenue, it should: a. reduce output, but continue producing in the short run. b. increase output
c. shut down. d. not alter its production level since it is earning a profit.