A beneficial supply shock would cause
A) a movement up the short-run Phillips curve.
B) a movement down the short-run Phillips curve.
C) the short-run Phillips curve to shift upward and to the right.
D) the short-run Phillips curve to shift downward and to the left.
D
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Refer to Figure 23-3. Suppose that government spending increases, shifting up the aggregate expenditure line. GDP increases from GDP1 to GDP2, and this amount is $200 billion. If the MPC is 0.8, then what is the distance between N and L or by how much did government spending change?
A) $16 billion B) $40 billion C) $200 billion D) $1,000 billion
Sally recently got a 15 percent raise. She now purchases 7.5 percent more steak dinners. Sally's income elasticity for steak dinners is:
a. 0.5. b. 0.75. c. 1.5. d. 2.0.
Foreign direct investment is:
A. investment that occurs when a firm runs part of its operation abroad or invests in another company abroad. B. investment that occurs when a firm runs its operation domestically, and sells its product abroad. C. when foreign companies buy physical capital from the United States. D. when foreign companies buy and operate physical capital within the United States.
Which statement about income inequality is true?
a. Income inequality is the disparity between those with higher and lower incomes. b. Income inequality and poverty are synonymous terms. c. Income inequality applies to the condition of people who cannot afford necessities. d. Income inequality refers to the percentage of the population living below the poverty line.