Other things the same, as the price level rises,
a. the interest rate rises causing aggregate demand to shift.
b. the interest rate rises causing a movement along a given aggregate-demand curve.
c. the interest rate falls causing aggregate demand to shift.
d. the interest rate falls causing a movement along a given aggregate-demand curve.
b
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We expect the demand curve in the perfectly competitive industry to be
a. negatively sloped. b. vertical. c. horizontal. d. perfectly elastic.
In 2005-2006, the magnitude of the federal budget deficit decreased, because
A. government spending increased precipitously. B. growth in income increased tax receipts by more than government spending increased. C. government spending decreased precipitously. D. income tax rates were significantly increased across the board.