President George W. Bush, who favored a smaller government sector,
a. believed we should increase G to eliminate a recessionary gap.
b. believed we should raise taxes to eliminate an inflationary gap.
c. favored an active fiscal policy just as well as those who favor a larger government sector.
d. argued against the use of an active fiscal policy.
c
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Refer to the above figure. Suppose the demand curve shifts from DA to DB, while the supply curve remains at SA. Which of the following statements is FALSE?
A) There has been an increase in demand. B) Supply has increased. C) More consumers in the market might have caused the demand curve to shift. D) The new equilibrium price is P2, and the new equilibrium quantity is F.
In the long run, under conditions of perfect competition, market forces come into play to
a. enhance profits. b. increase demand. c. eliminate profits. d. separate MR and AR.