Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________.
A. Rising; A
B. Falling; A; C
C. Falling; B: C
D. Rising; A; C
Answer: B
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In the Keynesian cross diagram, an increase in investment spending because companies become more optimistic about investment profitability causes the aggregate demand function to shift ________, the equilibrium level of aggregate output to rise, and
the IS curve to shift to the ________, everything else held constant. A) up; left B) up; right C) down; left D) down; right
Suppose there are 100 consumers with identical individual demand curves. When the price of a movie ticket is $8, the quantity demanded for each person is 5 . When the price is $4, the quantity demanded for each person is 9 . Assuming the law of demand holds, which of the following choices is the most likely quantity demanded in the market when the price is $6?
a. 700 b. 1,200 c. 400 d. 1,000 e. 100