Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2.
B. P2 and Y2.
C. P3 and Y1.
D. P2 and Y3.
Answer: D
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Economies of scale exist when:
A. the average cost of production falls as output rises. B. firms become larger. C. doubling all the inputs leads to less than double the output. D. input prices are falling.
The earnings of highly educated workers:
A. rise more slowly than those of less-educated workers. B. rise more rapidly than those of less-educated workers. C. rise at about the same rate as those of less-educated workers. D. stagnate earlier than do those of less-educated workers.
Basic supply and demand analysis indicates that having firms rather than the government provide health insurance to workers
A) changes neither the composition of the compensation that firms pay nor its level. B) changes both the composition of the compensation that firms pay and its level. C) changes the composition of the compensation that firms pay, but does not change its level. D) does not change the composition of the compensation that firms pay, but does change its level.
Statutory incidence of a tax deals with
A. the amount of revenue left over after taxes. B. the amount of taxes paid after accounting for inflation. C. the person(s) legally responsible for paying the tax. D. the amount of tax revenue generated after a tax is imposed.