Suppose that government spending increases in the Keynesian macroeconomic model. What will happen to the aggregate demand curve?
Select one:
a. The entire aggregate demand curve will shift up.
b. The entire aggregate demand curve will shift down.
c. The aggregate demand curve will rotate clockwise.
d. The aggregate demand curve will not change.
a. The entire aggregate demand curve will shift up.
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For a market with a linear demand curve and constant marginal cost of production, why are the reaction functions for the Cournot duopoly sellers also straight lines?
A) The reaction functions do not have to be straight lines, and they are only drawn this way in the book to keep the figures simple. B) Cournot thought the lines would be straight, but this was proven wrong by other economists. C) Marginal revenue is always linear when marginal costs are constant. D) We know that the marginal revenue curves for linear demand curves are also straight lines.
Scarcity implies that
A) the satisfaction of one person's want means another person's want can also be satisfied. B) the satisfaction of one person's want means another person will be more than satisfied. C) the satisfaction of one person's want means another person's want cannot be satisfied. D) no person's wants can be satisfied.