Inflation shocks and shocks to potential output are called ________ shocks.
A. monetary policy
B. aggregate demand
C. aggregate supply
D. fiscal policy
Answer: C
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Refer to the figure below. If P = $6, then the price elasticity of supply is: 
A. one B. positive, but less than one C. greater than one D. less than zero
Most business people calculate marginal cost and marginal revenue to decide how much to produce
a. True b. False Indicate whether the statement is true or false
An important difference between the situation faced by a profit-maximizing competitive price-searcher firm in the short run and the situation faced by that same firm in the long run is that in the short run,
a. price may exceed marginal revenue, but in the long run, price will equal marginal revenue. b. price may exceed marginal cost, but in the long run, price will equal marginal cost. c. price may exceed average total cost, but in the long run, price will equal average total cost. d. there are many firms in the market, but in the long run, there are only a few firms in the market.
Based on the graph showing rational expectations and the AD/AS model, how do shifts in the short-run aggregate supply and aggregate demand curves influence RGDP?
a. Since both curves move to the left, RGDP decreases.
b. Since both curves move to the right, RGDP increases.
c. Since the curves move equally in opposite directions, RGDP does not change.
d. Since both curves become vertical, RGDP becomes zero.