Multiple Choice
The AD-curve has a negative slope since
A) firms will produce less if they have to lower their prices
B) lower prices mean higher real wages so firms can no longer afford to produce as many goods and services
C) a decrease in the price level increases real money balances, leading to lower interest rates and increased spending
D) lower prices drive up the demand for goods since buyers fear future market shortages
E) lower prices increase consumer confidence, which encourages spending
Correct Answer:
Verified
Correct Answer:
Verified
Q9: The Keynesian AS-curve implies that<br>A)the economy is
Q10: If restrictive monetary policy leads to a
Q11: To maintain a fixed level of aggregate
Q12: The natural rate of unemployment is<br>A)always zero<br>B)the
Q13: The AS-curve is horizontal or very flat
Q15: A shift of the AD-curve to the
Q16: In the Keynesian aggregate supply curve case,
Q17: A large decrease in the income tax
Q18: Which of the following is FALSE?<br>A)the AS-curve
Q19: Expansionary fiscal policy is very effective in