Suppose that in 2018, all prices in the economy double and that all wages and salaries also double. In 2018 you
A) are worse off than you were in 2017 as you can no longer afford to buy as many goods and services.
B) are better off than you were in 2017 as your salary is higher than it was in 2017 and you can now buy more goods and services.
C) are no better off or worse off than you were in 2017 as the purchasing power of your salary has remained the same.
D) cannot determine whether you are better off or worse off than you were in 2017, because the purchasing power of your salary cannot be determined.
Answer: C
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The AD curve is a graph depicting the
A) relationship between the price level and the quantity of real GDP demanded. B) relationship between the price level and potential GDP. C) relationship between the price level and the quantity of real GDP supplied. D) business cycle during expansions and recessions. E) relationship between the aggregate quantity of real GDP demanded and the aggregate quantity of real GDP supplied.
Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________, 
A. Rising; B; C B. Falling; A; C C. Falling; A; B D. Rising; A; C