Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward
B. Short-run aggregate supply shifting downward
C. Aggregate demand shifting rightward
D. Aggregate demand shifting leftward
Answer: B
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Consider the following:
(i) Suppose a competitive industry has some factor of production whose supply is perfectly inelastic. As the demand for the industry's product rises and falls, what happens to the factor's employment and its rent? (ii) Repeat part i for the case where factor supply is perfectly elastic.
An import ban results in
A) an increase in the product's price. B) a decrease in the quantity of the product bought and sold. C) a decrease in the supply of the product. D) all of the above.
The fraction of an increase in income that is saved is referred to as the _____
a. marginal propensity to save b. average propensity to save c. marginal propensity to consume d. average propensity to consume e. saving-consumption ratio
Transfer payments are payments that are:
A. made in market transactions in order to get the seller to transfer the goods or services to the buyer. B. made in order to obtain public goods or services. C. payments made to households that can then be spent by the households. D. made to firms in order to transfer goods and services to the government.