The net result of deflation is to:
A. decrease consumption and investment, decreasing aggregate demand.
B. decrease consumption and increase investment, decreasing aggregate demand overall.
C. increase consumption and investment, increasing aggregate demand.
D. increase consumption and decrease investment, increasing aggregate demand overall.
A. decrease consumption and investment, decreasing aggregate demand.
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In regulating a natural monopoly, the price strategy that ensures the highest possible output and zero profit is one that sets price
A) corresponding to the demand curve where marginal revenue equals zero. B) equal to average variable cost where it intersects the demand curve. C) equal to average total cost where it intersects the demand curve. D) equal to marginal cost where it intersects the demand curve.
If a competitive firm has a U-shaped marginal cost curve then
A) the profit maximizing output will always generate positive economic profit. B) the profit maximizing output will always generate positive producer surplus. C) the profit maximizing output is found where MC = MR and MC is decreasing. D) the profit maximizing output is found where MC = MR and MC is constant. E) the profit maximizing output is found where MC = MR and MC is increasing.