How does the aggregate demand and aggregate supply model return to long-run equilibrium after an increase in spending growth?
A. The SRAS curve shifts up and to the left as inflation expectations adjust.
B. The AD curve shifts back to the left as inflation expectations adjust.
C. The AD curve shifts out to the right as inflation expectations adjust.
D. The SRAS curve shifts down and to the left as inflation expectations adjust.
Ans: A. The SRAS curve shifts up and to the left as inflation expectations adjust.
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The region of demand in which the monopolist will choose a price-output combination will be:
A. Inelastic because as price declines and output increases, total revenue will increase B. Inelastic because as price declines and output increases, total revenue will decrease C. Elastic because as price declines and output increases, total revenue will decrease D. Elastic because as price declines and output increases, total revenue will increase
A craze for apples in Riverdale increases the quantity demanded at every price by five bushels. Between any two prices, the new demand curve will be ____ the old demand curve.
A. more elastic than B. less elastic than C. equal in elasticity to D. More information is needed to predict the relationship.