Given a fixed upsloping AS curve, a rightward shift of the AD curve will ________.
A. increase both the price level and real output
B. cause cost-push inflation
C. increase the price level but not real output
D. increase real output but not the price level
Answer: A
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Using the figure above, suppose education is provided by public colleges, where tuition is set at $10,000 a year. Then, ________ million students are enrolled, and the taxpayers cover ________ of marginal cost per student
A) 15; $15,000 B) 7.5; $5,000 C) 3.5; none D) 15; $25,000 E) 7.5; $15,000
Belize, a country in Central America, has a small coffee industry. Suppose Belize does not have free trade but it has comparative advantage in coffee production. If Belize allowed international trade, what would be the gains from trade?
A) Belize coffee producers would gain from trade. B) Belize coffee consumers would gain from trade. C) Belize would gain tariff revenue from trade. D) All of these answers are gains from trade.