Friday

April 18, 2014

April 18, 2014

Posted by **Bobbie** on Sunday, April 8, 2012 at 5:08pm.

1.A decrease in aggregate demand causes a decrease in ______ only in the short run, but causes a decrease in ______ in both the short run and the long run.

a)real GDP; the price level

b)the price level; the price level

c)real GDP; real GDP

d)the price level; real GDP

*I believe after reading that the answer is d*

2. Workers and firms both expect that prices will be 3% higher next year than they are this year. As a result,

a)aggregate demand will increase by 3%

b)the purchasing power of wages will rise if wages increase by 3%

c)the short-run aggregate supply curve will shift to the left as wages increase

d)workers will be willing to take lower wages next year

*I believe the answer is c.

3) A decrease in aggregate demand results in a(n)______ in the _____.

a)recession; long run

b)recession; short run

c)expansion; short run

d)expansion; long run

I believe it may be b because there will be less money during a short time but I am unsure.

Thanks for your help

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