Professor Tabarrok suggests that the most important thing to understand about the AD curve is that:
A. changes in monetary or fiscal policy are incapable of shifting the AD curve.
B. changes in inflation can rotate the AD curve.
C. changes in spending growth can shift the AD curve.
D. changes in real GDP growth cause movement along the AD curve.
Ans: C. changes in spending growth can shift the AD curve.
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If Lauren's substitution effects outweigh her income effects, her labor supply curve will
A. Appear vertical. B. Bend backward. C. Slope upward. D. Appear horizontal.
The civilian labor force consists of:
A. all civilians over the age of 16. B. the employed plus the unemployed who are not in the military. C. only individuals who are actually at work during a given week. D. civilians who are not in prisons or mental hospitals.
In the short run, when prices don't have enough time to change, the Federal Reserve:
A. can influence the level of interest rates in the economy. B. cannot influence the level of interest rates in the economy. C. can influence the level of interest rates in the economy but generally will not because it would be destabilizing. D. can only affect the amount of money in the economy.
Recall the Application about the 1998 merger between Pennzoil and Quaker State to answer the following question(s). The merger resulted in a company with a market share of 38 percent: 29 percent from Pennzoil and 9 percent from Quaker State.Recall the Application. A recent study concluded that following the merger between Pennzoil and Quaker State, the market share of Pennzoil products ________ and the market share of Quaker State products ________.
A. increased; increased B. increased; decreased C. increased; did not change D. did not change; increased