The aggregate demand curves in Figure 13.1 have a positively-sloped portion. The reason this can happen is ________
A) sloppy editing
B) the monetary policy response to declining inflation causes the real interest rate to fall, which causes output to rise
C) a sudden increase in potential output
D) changes in expected inflation cause the real interest rate to change in the opposite direction
E) rising inflation causes financial frictions to increase
D
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If households pay a fixed annual fee for trash disposal,
A) households will all tend to produce the same amount of garbage. B) households have no incentive to cut back on the amount of garbage they generate. C) that fee will provide households with an incentive to cut back on the amount of garbage they generate. D) that fee will discourage households from throwing out reusable materials. E) that fee will discourage households from throwing out toxic or otherwise harmful materials.
The predominant condition that encourages governments to place price floors on markets is
a. the need for consumers to buy products at reasonable prices b. a war situation in which excess demands occur resulting in price increases c. a substantial increase in income, which shifts the demand curve to the left d. a series of substantial crop failures that shift the supply curve of food to the left e. technological changes that shift the supply curve to the right