Author Question: Suppose that an increase in aggregate demand causes an unplanned depletion in business inventories. ... (Read 54 times)

jc611 · **on:** Jun 30, 2018

Suppose that an increase in aggregate demand causes an unplanned depletion in business inventories. Which of the following situations will result from this?
a. The economy moves up the short-run Phillips curve.
b. The short-run Phillips curve shifts to the right.
c. The short-run Phillips curve shifts to the left.
d. The aggregate supply curve shifts to the left.
e. The economy moves down the short-run Phillips curve.

Question 2

If a huge percentage change in price leads to a small percentage change in quantity demanded, then demand is said to be elastic.
a. True
b. False
Indicate whether the statement is true or false