Refer to Figure 7.7. A technological improvement is best represented by:
A. a movement from point a to point b.
B. a movement from point d to point a.
C. a movement from point c to point a.
D. a movement from point c to point d.
A. a movement from point a to point b.
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An increase in expected inflation results in
A) lower nominal interest rates and higher bond prices. B) lower real interest rates and higher bond prices. C) higher real interest rates and lower bond prices. D) higher nominal interest rates and lower bond prices.
"Higher prices always yield higher revenues." Do you agree or disagree? Why?
What will be an ideal response?
With an upward sloping SAS curve, an expansionary monetary policy that affects the price level but not real output could be the result of a shift of:
A. only the SAS curve. B. both the AD and SAS curves. C. neither the SAS curve nor the AD curve. D. only the AD curve.
The ________ to produce any given level of output is indicated by the point of tangency between an isocost line and the isoquant corresponding to that level of output.
A. least desirable way B. least costly way C. only possible way D. most costly way