Answer: bring real GDP back to potential GDP more quickly but would result in a permanently higher price level.
Explanation:
When the government uses fiscal policy to bring real GDP back to the potential GDP, the movement back to potential GDP occurs faster because the spending by government increases the aggregate demand in the economy much more faster.
A higher price level would be formed permanently however because the spending by government would lead to aggregate demand rising such that prices need to rise in order to reflect that goods are now more scarce in relation to demand.
<span>C. The advertiser is appealing to the consumer's positive bias: the association of the star athlete with the clothing leads to sales.</span>
Answer:
The correct answer is B. demand for good X will increase.
Explanation:
Two goods, X and Y, are said to be substitutes if they can be used to serve the same purpose. Thus, if good X is a substitute to good Y, then X can be used in place of Y and Y can be used in place of X.
For substitute goods, the cross-price elasticity of demand is positive. This means that if the price of one good rises, the demand for the substitute good increases.
The answer is "A" (demographics) just took the PF test