How is a rise in confidence reflected in the aggregate supply/aggregate demand model?
a. Because a rise in confidence is associated with higher consumption and investment demand, it will lead to an inward shift in the AD curve and shift equilibrium from E0 to E1, a higher quantity of output and a higher price level.
b. Because a rise in confidence is associated with higher consumption and investment demand, it will lead to an outward shift in the AD cur and shift equilibrium from E0 to E1, a higher quantity of output and a higher price level.
c. Because a rise in confidence is associated with higher consumption and investment demand, it will lead to an outward shift in the AD curve and shift equilibrium from E0 to E1, a higher quantity of output and a lower price level.
d. Because a rise in confidence is associated with higher consumption and investment demand, it will lead to an inward shift in the AD cur and shift equilibrium from E0 to E1, a higher quantity of output and a lower price level.
b. Because a rise in confidence is associated with higher consumption and investment demand, it will lead to an outward shift in the AD cur and shift equilibrium from E0 to E1, a higher quantity of output and a higher price level.
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Data concerning the four-firm concentration ratios for U.S. manufacturing industries indicate that
a. very few oligopolies exist in the real world but the oligopoly model is still useful because it tells us something about firm behavior b. oligopolies are the second most prevalent market structure, monopoly being the first c. the four leading firms usually have less than 10 percent of industry sales d. the ratios are considerably less than the ratios in Canada and Western Europe e. oligopolies are very common
In the simple Keynesian model, a rightward shift in the aggregate demand curve __________ result in a change in the price level when the economy is in the horizontal segment of the AS curve and ___________ result in a change in the price level if the economy is in the vertical segment of the AS curve
A) will not; will B) will not; will not C) will; will not D) will; will
As we approached the end of the millennium, many economic crackpots advised citizens to hold large quantities of cash in anticipation of Y2K disasters. What effect would this have had on velocity if many people had been foolish enough to follow this advice?
A. Velocity would have decreased. B. Velocity would have increased. C. Velocity would have remained constant. D. Velocity is unrelated to cash balances.
According to business activity charts for the last 100 years, the point of the highest business activity in the United States occurred
A. during the Trump administration. B. during the 1920s bull market boom. C. during World War II. D. during the Vietnam War.