Sophia (Macroeconomics) - Unit 2 Milestone

Sophia (Macroeconomics) - Unit 2 Milestone Which statement below regarding aggregate demand is true? CORRECT ANSWER- It expresses an inverse relationship between price level and RGDP. If demand becomes more elastic, which of the following will happen, as demonstrated by the graph shown here? CORRECT ANSWER- The incidence of the subsidy on the consumer will decrease. Select the statement below that is true of long run aggregate supply curves. CORRECT ANSWER- There is no relationship between price level and RGDP. If an excise tax is imposed on a product, which of the following will happen? CORRECT ANSWER- The supply curve will shift upward by the amount of the tax. Based on the graph above, if market price is $19 per unit, what is happening at that market price? CORRECT ANSWER- Price is at equilibrium. The people of a certain Mediterranean village always eat salad with balsamic vinegar and olive oil as dressing. If the olive crop fails one year because of a terrible storm, what most likely would happen to the demand for balsamic vinegar that the people of this village purchase? CORRECT ANSWER- The demand for balsamic vinegar purchased will decrease because it is a complement to olive oil. What economic rule is generally used in the decision of a regulator to impose a binding price constraint? CORRECT ANSWER- When the benefit to a specific group of people is greater than deadweight loss When an economy is producing to the left of the LRAS, __________. CORRECT ANSWER- expansionary fiscal policies can be put in place Which of the following would NOT cause a shift in the supply curve for cheese? CORRECT ANSWER- The results of a medical study show that eating too much cheese can lead to premature aging.