Answer: D. The price level will fall and rGDP will also fall if the demand falls.
Starting from long run equilibrium, in response to a decrease in aggregate demand:
A. The price level will increase more in the long run than in the short run.
B. The short run equilibrium level of real output will be greater in the long run than in the short run.
C. Neither the price level nor real output will change in the long run.
D. The price level will fall and rGDP will also fall if the demand falls.
Economics
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Which of the following is true? In the above figure, if the market is
A) a monopoly, output will be Q1 and price will be P3. B) a monopoly, output will be Q3 and price will be P3. C) perfect competition, output will be Q2 and price will be P2. D) perfect competition, output will be Q1 and price will be P1. E) perfect competition, output will be Q3 and price will be P3.
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The figure above shows a monopoly's total revenue and total cost curves. The monopoly's marginal revenue equals its marginal cost when it produces
A) 0 units of output. B) 5 units of output. C) 15 units of output. D) 20 units of output.
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Wine Distribution Merger Two of UK's larger wine distribution companies, Bibendum and PLB, merged their businesses in October 2014 . Bibendum is primarily a restaurant supplier while PLB focuses on supplying wines to retailers. Does this suggest a mechanism through which the merger might create value?
Economics