Sophia (Macroeconomics) - Unit 2 Milestone questions with correct answers

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