If a positive permanent supply shock were to occur, the resulting equilibrium would be a:
A. higher level of output at lower prices.
B. lower level of output and prices.
C. higher level of output and prices.
D. lower level of output at higher prices.
Answer: A
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A period of very high and accelerating inflation is known as
A) deflation. B) disinflation. C) hyperinflation. D) nuclear inflation.
According to the Taylor Principle, when the inflation rate rises, the nominal interest rate should be ________ by ________ than the inflation rate increase
A) increased; more B) increased; less C) decreased; more D) decreased; less
A market situation in which a large number of firms produce similar but not identical products is
A) a collusive market structure. B) competitive monopoly. C) a homogeneous market. D) monopolistic competition.
Suppose Julia and Zach are the only consumers of milk. Julia's demand for milk is defined as QdJulia = 12 - 3P at prices below $4 and zero for prices above $4. Zach's demand for milk is defined as QdZach = 10 - 2P at prices below $5 and zero for prices above $5. Market demand when price is $4 is:
A. QdMarket = 12 - 3P. B. QdMarket = 10 - 2P. C. QdMarket = 22 - 3P. D. QdMarket = 22 - 5P.