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
You might also like to view...
Marge would like her husband Homer to drink less beer. All of the following are ways she could encourage Homer to drink less beer except
A) pay him to drink less beer. B) convince him that beer is good for his health. C) refuse to cook dinner for him if he does not cut back on his beer drinking. D) make him pay her $10 for every beer he drinks.
Profits resulting from luck can be distinguished from profits attributable to shrewd predictions by
A) calculating the opportunity cost of earning the profits. B) comparing the profits with interest rates. C) finding out whether they lead to reduced revenue or increased costs. D) no known empirical test. E) whether or not they were generally anticipated.
Which amount is not included in gross domestic product?
A) Payments to a physician for treatment of a respiratory condition caused by air pollution B) The purchase price of a used car bought from a friend C) Wages of government employees D) Wages of people who clean up toxic chemical spills E) Wages of people who sell used cars
If aggregate demand decreases and neither short-run nor long-run aggregate supply changes, then
A) the price level increases in the short-run and decreases in the long run. B) there is an inflationary gap. C) there is a recessionary gap. D) in the long run, the long-run aggregate supply will decrease.