High levels of inflation ________ the real value of money and, hence, ________ short-run equilibrium output.
A. reduce; increase
B. increase; increase
C. increase; decrease
D. reduce; decrease
Answer: D
You might also like to view...
A factor of production that can be easily changed in the relevant time period is called a
A) fixed input. B) temporary input. C) variable input. D) substitution input.
If the price elasticity of supply equals zero, this implies that:
a. suppliers can easily change the quantity supplied of the product as the price of the product changes. b. the period under consideration is a very long-run time period. c. the supply curve is perfectly vertical. d. the percentage change in quantity supplied exceeds the percentage change in product price. e. the percentage change in quantity supplied equals the percentage change in product price.
Which of the following conditions is true for a nation operating at a point lying inside its production possibilities curve?
a. The nation is experiencing a technological breakthrough in one of its key industries. b. The nation is clearly utilizing its resources efficiently. c. The nation is producing the maximum output that can be produced with a limited quantity of resources. d. The nation is not utilizing its resources efficiently. e. The nation is producing the maximum output that can be produced with its unlimited quantity of resources.
If a good has a perfectly inelastic short-run supply curve, an increase in demand will: a. increase the price and quantity exchanged in the short run
b. increase the price and but leave the quantity exchanged the same in the short run. c. increase the quantity exchanged but leave the price the same in the short run. d. leave both price and quantity exchanged the same in the short run.