An increase in the expected future marginal product of capital would cause the IS curve to
A) shift up and to the right.
B) shift down and to the left.
C) remain unchanged.
D) remain unchanged if firms face borrowing constraints; otherwise, shift down and to the left.
A
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Higher resource costs shift the
A) long-run aggregate supply curve leftward, decreasing real GDP and increasing potential GDP. B) short-run aggregate supply curve leftward, raising the price level and decreasing potential GDP. C) short-run aggregate supply curve leftward, raising the price level and decreasing real GDP so it is less than potential GDP. D) short-run aggregate supply curve rightward, raising the price level and decreasing real GDP so it is less than potential GDP.
Assume initially that the price of X (measured on the horizontal axis) is $9 and the price of Y (measured on the vertical axis) is $4. If the price of X now declines to $6, the budget line will:
A. be unaffected. B. shift outward on the vertical axis. C. shift inward on the horizontal axis. D. shift outward on the horizontal axis.