Falling output, in the short run, could be due to:
A. an increase in short-run aggregate supply.
B. a reduction in aggregate demand.
C. an increase in long-run aggregate supply.
D. an increase in aggregate demand.
Answer: B
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A firm that is earning zero economic profit should go out of business.
Answer the following statement true (T) or false (F)
Which statement is true?
A. The United States' economic system leads to an equitable distribution of income. B. One of the basic functions of the United States' government is to transfer some income from the rich and the middle class to the poor. C. The price mechanism and the definition of economics are incompatible. D. None of the statements are true.
Federal Reserve Notes are
A. the currency part of the United States money supply. B. United States government securities owned by the Fed. C. the backing for all bank account balances. D. used exclusively by the government to pay off its debt.
The concept of opportunity cost is that
A) in a market economy, taking advantage of profitable opportunities involves some money cost. B) the economic cost of using a factor of production is the alternative use of that factor that is given up. C) taking advantage of investment opportunities involves costs. D) the cost of production varies depending on the opportunity for technological application.