A relatively steep aggregate demand curve indicates that
A) velocity is relatively constant.
B) the economy is near full employment.
C) inflation is relatively high.
D) spending is insensitive to changes in the price level.
D
You might also like to view...
In a recession, the trade balance often improves because
a. service exports exceed manufactured good exports b. banks sell depressed assets c. fewer households can afford luxury imports d. direct investment abroad declines e. the capital account exceeds the current account
If the economy is producing output at the potential level of GDP, then:
a. an expansionary fiscal policy will increase real GDP in the long run. b. deficit spending by the federal government will increase prices in the long run. c. deficit spending will increase both, the real GDP and the prices in the long run. d. a tax increase will not lower the aggregate demand.