Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be:
A. P1 and Y2.
B. P2 and Y3.
C. P3 and Y1.
D. P2 and Y2.
Answer: B
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One of the most basic models of the economy is:
A. real GDP per capita. B. the current population survey. C. consumer expenditure. D. the circular flow model.
The ________ approach relies on the right discretionary policy to close the gap through a ________ of the aggregate demand curve
a. passive; decrease b. active; increase c. passive; increase d. active; decrease
When the money market is drawn with the value of money on the vertical axis, if the Fed sells bonds then
a. the money supply and the price level increase. b. the money supply and the price level decrease. c. the money supply increases and the price level decreases. d. the money supply increases and the price level increases.
Which of the following examples, ceteris paribus, is most likely to cause a leftward shift in that nation’s long-run aggregate supply curve?
a. Canada reduces government regulations on businesses. b. Mexico experiences 10 years of favorable weather conditions. c. The United States lowers its retirement age by 10 years. d. Norway increases access to on-the-job training programs.