Refer to the information provided in Figure 29.2 below to answer the question(s) that follow.
Figure 29.2Refer to Figure 29.2. If economic policy causes output to decrease to Y0 and the price level to decrease to P0, the aggregate demand curve shifts from
A. AD1 to beyond AD2.
B. AD2 to below AD1.
C. AD2 to AD1.
D. AD1 to AD2.
Answer: C
You might also like to view...
Katie has a choice of spending $6.00 for another hamburger, which has a marginal utility of 30, or $9.00 for another pizza. For her to choose the pizza, it would have to have a marginal utility of at least
A) 9. B) 30. C) 31. D) 46.
Assume that there are no excess reserves, no savings accounts, and no currency held by the public. If the demand deposit expansion multiplier is 4, the required reserve ratio must be
A) also 4. B) .2. C) .25. D) .5.
If the public has correct rational expectations and the Fed increases both reserve requirements and the discount rate, it would be expected to result in: a. a higher level of real output and a lower price level. b. a lower price level but no change in real output
c. a higher price level and a reduced level of real output. d. a higher price level but no change in real output.
Which of the following must be true if average variable costs are decreasing?
a. Average fixed cost exceeds average total cost. b. Marginal cost exceeds average variable cost. c. Marginal cost is less than average variable cost. d. Marginal cost is less than average total cost.