If the government increases aggregate demand when the economy is at both short-run and long-run equilibrium, the full long-run effect of this fiscal policy will be to
A) increase real Gross Domestic Product (GDP).
B) increase the price level.
C) increase either the real Gross Domestic Product (GDP) or the price level, depending on the length of the time lag.
D) decrease both real Gross Domestic Product (GDP) and the price level.
B
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A perfectly competitive ebook publishing firm currently sells its ebook at the market price of $6. Its average total cost is $5.50. In this case:
a. since average total cost is less than the price, the firm will shut down. b. the firm has positive economic profits. c. the firm is losing money but will continue to operate. d. the firm has zero economic profits.
The term ceteris paribus is an economic assumption that means
A) let the buyer beware. B) logical common sense. C) the detail is in the interrelationship. D) other things being equal.