chap 12 - 1.

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
1.   (Advanced analysis) Assume that the MPC is .8 in an economy that has an aggregate supply curve with a  slope of 1. Also, suppose that the price level is flexible downward. A decrease in investment spending of $10  billion will shift the aggregate demand curve leftward by:    Student Response Value Correct Answer Feedback A. $50 billion and  decrease real GDP  by $50 billion.      B. $50 billion and  decrease real GDP  by $25 billion. 100%       C.  $10 billion and  decrease real GDP  by $10 billion.      D.  $10 billion and  decrease real GDP  by $25 billion.       Score: 1/1    2.   Menu costs:    Score: 0/1   
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
  In the immediate short run, both input and output prices are fixed.    Score: 0/1    4.   Which of the following is a  true  statement?    Score: 1/1    5.  
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 5

chap 12 - 1.

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online