Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward
B. Short-run aggregate supply shifting downward
C. Aggregate demand shifting rightward
D. Aggregate demand shifting leftward
Answer: B
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Perhaps the best measure of economic progress is
A. the annual inflation rate, since it accounts for what is happening to prices. B. the growth rate of real GDP per capita, since it takes into account both price changes and population growth. C. the amount of working time needed for an individual worker to afford certain goods and services. D. the annual growth rate in the population.
Refer to the scenario above. Which country has the highest income per capita in PPP dollars?
A) Country 1 B) Country 2 C) Country 3 D) Country 4
Comment on the following statement: "Input and output markets should be considered separately because they operate independently of one another."
What will be an ideal response?
Which of the following is not a basic assumption underlying the theory of consumer behavior?
A) Consumers prefer more to less. B) Consumer preferences depend on the amounts of goods they consume as well as the amounts being consumed by other consumers. C) Goods are continuously divisible, that is, consumers can always purchase one more or one less unit of a good. D) Consumers have well-behaved preferences, that is, preference orderings are complete.