If the aggregate expenditure line has shifted downward, which of the following is the most likely cause?
a. There have been reports of good economic news.
b. The Fed has conducted an open market sale of bonds.
c. Income tax rates have been lowered.
d. The Fed has conducted an open market purchase of bonds.
e. Exports have increased.
B
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The multiplier represents the ratio of the total shift in aggregate demand to the
A) initial shift in aggregate demand. B) total shift in long-run aggregate supply. C) initial shift in short-run aggregate supply. D) total shift in short-run aggregate supply.
If the inverse demand curve a monopoly faces is p = 100 - 2Q, and MC is constant at 16, then profit maximization
A) is achieved when 21 units are produced. B) is achieved by setting price equal to 21. C) is achieved only by shutting down in the short run. D) cannot be determined solely from the information provided.