When expansionary monetary policy pushes real interest rates to an artificial low, the Austrian view of the business cycle predicts this will lead to
a. an increase in aggregate demand and a lengthy expansion in real output.
b. a recession, followed by a strong and lengthy expansion in real output.
c. malinvestment during an economic boom, followed by a recession.
d. malinvestment during a temporary recession, followed by a strong and lengthy economic boom.
C
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When summer hurricanes pass through the Gulf of Mexico and force oil drillers to evacuate their rigs,
A) the supply of oil increases, which therefore increases price. B) the supply of oil increases, which therefore decreases price. C) the supply of oil decreases, which therefore increases price. D) the supply of oil decreases, which therefore decreases price.
Which of the above shows the correct relationship between demand and marginal revenue for an imperfectly competitive firm?
A. A B. B C. C D. D
After a shift in the aggregate demand curve, which variable adjusts to restore general equilibrium?
A. Consumption spending B. Price level C. Investment spending D. Real interest rate
If TR > TVC but TR < TC, a firm would ________ in the short run and ________ in the long run.
A. operate; expand B. shut down; expand C. shut down; exit the industry D. operate; exit the industry