The Exact Change in Equilibrium Output Due to a Shift

question 31

Multiple Choice

The exact change in equilibrium output due to a shift in short-run aggregate demand depends on:

• A)the amount of tax imposed
• B)the steepness of the aggregate supply curve.
• C)the steepness of the aggregate demand curve
• D)the gap between the supply curve and the demand curve.
• E)the consumption pattern in the economy.

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Definitions:

Monopoly Power

The ability of a single seller in a market to control prices and exclude competition.

Sherman Act

A landmark federal statute in the antitrust law of the United States, passed in 1890, which prohibits certain business activities that federal government regulators deem to be anti-competitive.

Alcoa Case

A 1945 case in which the courts ruled that the possession of monopoly power, no matter how reasonably that power had been used, was a violation of the antitrust laws; temporarily overturned the rule of reason applied in the U.S. Steel case.