To determine short-run equilibrium in the economy, we use an aggregate supply curve that is:

Consider the demand curve of the form Q = a - bP. If a is a positive real number, and b = 0, then demand is

A) completely inelastic. B) inelastic, but not completely. C) unit elastic. D) elastic, but not infinitely.

Suppose the MPC is 0.85 . If government purchases increase by $10 billion and net taxes fall by $10 billion, equilibrium output will

a. fall by $10 billion b. increase by $10 billion c. increase by $20 billion d. increase by $66.7 billion e. increase by $123.3 billion