When a shift in aggregate demand occurs, the effect will be divided between a change in output and a change in price level. How the effect is divided depends on the
a. amount of inflation in the economy.
b. slope of the SRAS curve.
c. size of the multiplier.
d. position of the AE curve.
e. slope of the AD curve.
Answer: a. amount of inflation in the economy.
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Any risk-averse individual would always
A) take a 10% chance at $100 rather than a sure $10. B) take a 50% chance at $4 and a 50% chance at $1 rather than a sure $1. C) take a sure $10 rather than a 10% chance at $100. D) take a sure $1 rather than a 50% chance at $4 and a 50% chance at losing $1. E) do C or D above.
If the price elasticity of supply for a window manufacturer is 1.5,
a. a 10% increase in the price of windows results in a 15% increase in the quantity of windows supplied. b. supply is considered to be inelastic. c. the manufacturer is likely operating very near capacity. d. All of the above are correct.
Which of the following is true?
A. ATC = AVC - AFC B. TVC/Q = TC/Q + TFC/Q C. ?TC/?Q = ?AVC/?Q D. ?TC/?Q = MC
The World Bank's view of the effectiveness of industrial policies in East Asia is that, in general, they
A) hindered growth. B) had little or no effect on growth. C) encouraged growth. D) are the main factor in the success of the East Asian economies.