Economic growth can be shown by
A. no change in the long-run aggregate supply curve.
B. a leftward shift in the long-run aggregate supply curve.
C. a rightward shift in the long-run aggregate supply curve.
D. a leftward shift in the production possibilities curve.
Answer: C
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The figure below shows the demand for meals at lunch and dinner for a proposed new restaurant. Suppose the marginal cost of a meal (both lunch and dinner) is constant at $10 per meal and marginal cost of providing the capacity is constant at $5 per meal. Once the managers have determined the profit-maximizing capacity, at lunch they will serve ________ meals and set a price of ________ per meal.
A) 800; $30 B) 200; $20 C) 200; $30 D) 600; $30
In which of the following externality situations would it be most likely that voluntary agreements could be used to internalize an externality?
A) littering on highways B) overharvesting of alligators in Louisiana C) poaching of elephants in Africa D) trees of one neighbor blocking a view of another
Refer to Figure b. Kate and Alice are sisters with a very strict mother. The girls are not allowed to watch television during the day when their mother is at work. The mother comes home one day and knows at least one girl was watching the television because it is warm. She sends the girls to their separate bedrooms while she decides what to do. After giving it some thought, she decides to send a message to the naughty girls and offers them the following deal: if they both deny watching TV, they will each be grounded for 3 weeks; if one squeals on the other, but the other denies watching TV, the squealer is grounded for 2 weeks, while the denier is grounded for 10; if they both squeal, each is grounded for 6 weeks. The following payoff matrix illustrates the girls' dilemma, with Kate's
payoff shown in the upper left-hand corner of each cell and Alice's in the lower right-hand corner. What is Alice's dominant strategy?
A. Squeal
B. Deny
C. Alice does not have a dominant strategy.
D. Alice's dominant strategy depends upon what Kate does.
When the Fed increases the money supply, interest rates:
a. rise. b. fall. c. are unaffected. d. rise and then fall. e. fall and then rise.