Which of the following will most likely result from a decrease in government spending?
A) An increase in output
B) An increase in the price level
C) An increase in employment
D) A decrease in aggregate supply
E) A decrease in aggregate demand
Ans: E) A decrease in aggregate demand
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When the AE curve shifts upward because the price level falls, the corresponding effect on the aggregate demand curve is
A) a shift rightward of the aggregate demand curve. B) a movement upward along the aggregate demand curve. C) a shift leftward of the aggregate demand curve. D) a movement downward along the aggregate demand curve. E) nothing because aggregate demand does respond to changes in the price level.
If the four-firm concentration ratio for the market for diapers is 73 percent, then this industry is best characterized as
A) a monopoly. B) monopolistic competition. C) an oligopoly. D) perfect competition. E) either a monopoly or monopolistic competition.