A decrease in the incomes of people who buy canoes would cause the demand for canoes to decrease
Indicate whether the statement is true or false
TRUE
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In the above figure, starting at E1, if there is a supply shock that is permanent, the
A) aggregate supply would shift to SRAS1 and LRAS1 would shift to LRAS0. B) aggregate supply would shift to SRAS1 and LRAS0 would shift to LRAS1. C) aggregate supply would shift to SRAS2 and LRAS0 would shift to LRAS1. D) aggregate supply would shift to SRAS1 and then return to SRAS0.
The nominal deficit depends primarily on:
A. the debt. B. the rate of inflation. C. government's expenditures and receipts. D. the difference between potential and actual output.
For a fixed inflation rate target, an increase in the inflation rate corresponds to a ________ the aggregate demand curve and an increase in exogenous spending corresponds to a ________ the aggregate demand curve.
A. shift left of; shift right of B. shift left of; movement up C. movement up; movement down D. movement up; shift right of
In the above figure, point E represents the level of real GDP at which planned saving equals planned investment. At point A
A. unplanned inventories decrease. B. changes in inventories cannot be determined. C. unused industrial capacity exists in the economy. D. unplanned inventories increase.