Beginning from a position of long-run equilibrium at the full-employment level of real GDP, the economy's short-run response to a decrease in the aggregate demand curve would be a:
a. movement upward along the short-run aggregate supply curve
b. movement upward along the long-run aggregate supply curve.
c. downward shift in the short-run aggregate supply curve.
d. movement downward along the short-run aggregate supply curve.
d
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Which of the following statements is true?
A. Comparative advantage means that total world output will be greatest when each good is produced by the nation that has the highest domestic opportunity cost of producing it. B. Specialization will be complete among nations when opportunity costs increase as the nations produce more of a particular product. C. Specialization will be less than complete among nations when opportunity costs increase as the nations produce more of a particular product. D. Comparative advantage means that a nation can gain from trade only if it has a lower labor productivity than its trading partner.
Refer to the above figure. The figure represents the saving function for the consumer. Point A represents
A) the point at which saving equals zero. B) a situation in which saving is positive. C) a situation in which saving is negative. D) the amount of autonomous consumption.
Fiscal policy refers to changes in
A) the money supply and interest rates that are intended to achieve macroeconomic policy objectives. B) federal taxes and purchases that are intended to fund the war on terrorism. C) state and local taxes and purchases that are intended to achieve macroeconomic policy objectives. D) federal taxes and purchases that are intended to achieve macroeconomic policy objectives.
Firms under-invest in safety because
A) firms are not concerned with safety. B) firms do not want their plants to be safe. C) firms are risk averse. D) firms do not enjoy all of the benefits from investments in safety.