Aggregate demand–aggregate supply analysis shows that in the long run the effect of increased aggregate spending on real GDP is:
a. negative.
b. close to infinity.
c. indeterminate.
d. zero.
e. positive.
d
You might also like to view...
A vertical merger is one that takes place between two companies producing different goods or services for one specific finished product
Indicate whether the statement is true or false
Ceteris paribus, an increase in the supply of a good causes which of the following?
a. Lowers the equilibrium price, and reduces the quantity bought and sold. b. Raises the equilibrium price, and raises the quantity bought and sold. c. Raises the equilibrium price, and increases the quantity bought and sold. d. Lowers the equilibrium price, and increases the quantity bought and sold. e. Equilibrium price and equilibrium quantity change are indeterminate.
Which of the following is a difference between the income effect and the substitution effect?
a. The income effect refers to the way a change in income alters the buying power of an individual, while the substitution effect occurs when a good becomes cheaper and people seek alternatives. b. The income effect refers to the way a change in price alters the buying power of an individual, while the substitution effect occurs when a good becomes expensive and people seek alternatives. c. The income effect refers to the way a change in price alters the buying power of an individual, while the substitution effect occurs when the opportunity cost of a good increases and people seek alternatives. d. The income effect occurs when a good becomes expensive and people seek alternatives, while the substitution effect refers to the way a change in income alters the buying power of an individual.
Which of the following is an example of active fiscal policy?
What will be an ideal response?