How is the effect of expansionary monetary policy depicted in an aggregate supply-aggregate demand graph?
A) The aggregate demand curve shifts rightward.
B) The aggregate supply curve shifts leftward.
C) The equilibrium level of income increases, but neither curve shifts.
D) The aggregate supply curve shifts rightward.
A
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Refer to the graph shown.
An economy is in both short- and long-run equilibrium at ________.
A. point A B. point B only C. point C only D. point B to C
The natural employment deficit ________ be used to determine the effectiveness of discretionary fiscal policy actions because ________
A) cannot; it excludes non-discretionary spending changes B) can; it includes non-discretionary spending changes C) cannot; it includes non-discretionary spending changes D) can; it excludes automatic stabilization expenditures
Suppose that X and Y are substitutes. If the price of Y increases, how will this change the market equilibrium for X?
a. Equilibrium price declines, and equilibrium quantity rises. b. Equilibrium price rises, and equilibrium quantity falls. c. Equilibrium price and quantity both decline. d. Equilibrium price and quantity both rise.
Which of the following would likely cause aggregate demand to shift to the left?
A. Higher tariffs on all imports into the United States B. Greater consumer confidence about the future C. Higher interest rates discouraging borrowing D. All of these would likely cause aggregate demand to shift to the left.