According to Keynesians, an increase in the money supply will have its least impact on GDP and the greatest impact on the price level when the aggregate demand curve intersects
a. the horizontal portion of the aggregate supply curve
b. the vertical portion of the aggregate supply curve
c. the upward sloping portion of the aggregate supply curve
d. either the horizontal or upward sloping portion of the aggregate supply curve
e. either the horizontal or upward sloping portion of the aggregate supply curve
B
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When analyzing the effects of changes in demand in an open economy, we assume that firms:
a. have only one fixed rate of return on various projects when deciding investment activity. b. have differing returns on various projects when deciding investment activity. c. are required to borrow only from domestic banks when funding investment activity. d. consider the effects of inflation on investment activity.
Suppose the price of burgers increases from $2 to $3 each. The degree to which quantity demanded responds to this price increase depends on the
A) price elasticity of demand. B) the price elasticity of supply. C) income elasticity of demand. D) cross elasticity of demand.