Refer to the figure above. If AD 1 shifts to AD 2, then the equilibrium output:
Increases from Q1 to Q3 while the price level falls from P2 to P1
Increases from Q1 to Q2 while the price level rises from P1 to P2
Increases from Q1 to Q3 while the price level rises from P1 to P2
Increases from Q1 to Q2 while the price level falls from P2 to P1
Increases from Q1 to Q2 while the price level rises from P1 to P2
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Paper money has been in use since the
a. Roman Empire. b. eleventh century in China. c. Civil War in the United States. d. development of money-center banking in nineteenth-century London.
When comparing a? $100 billion increase in government expenditure to a? $100 billion decrease in tax? revenue, the effect of the increase in government expenditure on aggregate demand is
A) greater than the effect of the tax decrease.
B) equal to the effect of the tax decrease.
C) less than the effect of the tax decrease.
D) positive whereas the effect of the tax decrease is negative.
E) negative whereas the effect of the tax decrease is positive.