Suppose that govt spending on defense rises by $50 billion. What happens to the AD curve?
A. It shifts right by $50 billion at each price level.
B. It shifts right by more than $50 billion at each price level.
C. It shifts right by less than $50 billion at each price level.
D. The aggregate demand curve does not shift; the aggregate supply curve shifts right by $50 billion at each price level.
Answer: B. It shifts right by more than $50 billion at each price level.
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A bilateral monopoly means
A) that a monopsonistic employer bargains with two unions. B) that a monopsonistic employer bargains with both an industrial and a craft union. C) that a monopsonistic employer bargains with a monopoly. D) that an industrial union bargains with a two-firm oligopoly.
Economic rent is a payment for a factor of production that elicits an increase in the quantity supplied.
Answer the following statement true (T) or false (F)