Author Question: Suppose the economy is at point B. If firms expect profits will be higher in the future, to what ... (Read 36 times)

jho37 · **on:** Jun 29, 2018

Suppose the economy is at point B. If firms expect profits will be higher in the future, to what point might the economy's move in the short run?

A) It stays at point B.
B) It shifts to a point such as A.
C) It shifts to a point such as C.
D) None of the above answers are correct because it is the SAS curve that shifts, not the AD curve.

Question 2

If a country has a capital and financial account surplus, that country's stock of international indebtedness is

A) increasing.
B) decreasing.
C) constant.
D) zero.