Refer to Figure 14.3. Suppose the economy is initially at long-run equilibrium and the economy experiences a demand shock such as a stock market crash. This is best represented by an initial movement from
A) point C to point A.
B) point C to point B.
C) point C to point D.
D) point D to point A.
C
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An externality is
A) a cost paid for by the producer of a good or service. B) a benefit realized by the purchaser of a good or service. C) anything that is external or not relevant to the production of a good or service. D) a benefit or cost experienced by someone who is not a producer or consumer of a good or service.
Which of the following could prevent the opportunistic behavior of firms?
A) efficient contracts B) good reputation C) revealing relevant information about firms D) All of the above
Specialization of labor occurs when work is assigned based on the: a. demands of the labor union. b. skills of the workers
c. experience of the workers. d. gender of the workers.
Why does the government provide benefits in-kind? Why don't we just give money to low-income people?