An economist who claims that an increase in government spending would result mainly in a higher price level believes the economy is operating where
a. the MPC is small.
b. the MPC is large.
c. aggregate supply curve is flat.
d. aggregate supply curve is steep.
d
You might also like to view...
Foreign investment in poor nations often requires
A) low rates of return to ensure the poor have a fair deal. B) high rates of return to justify the high risk of such investment. C) a constantly changing political structure to enhance profit opportunities. D) the total elimination of uncertainty in order to guarantee economic profit.
As the banking system in the United States evolves, it is expected that
A) the number and importance of small banks will increase. B) the number and importance of large banks will decrease. C) small banks will grow at the expense of large banks. D) the number and importance of large banks will increase.
A paper mill discovers that burning old tires is a cheaper way to get power rather than using coal, and they adopt the new technology. Which of the following will likely happen in the market for paper?
A. The demand for paper will increase. B. The supply of paper will increase. C. The supplyfor paper will remain constant. D. The supply for paper will decrease.
When aggregate expenditure at a particular level of GDP is more than output,
a. output will increase b. output will decrease c. output will remain constant d. there is not enough information to determine what happens to output e. prices will rise