Countries that engage in specialization and trade can consume at a level beyond their production possibilities frontier
Indicate whether the statement is true or false
True
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
The black market price for a legally prohibited good will be the same whether a $1,000 fine is placed on the buyer or the seller
Indicate whether the statement is true or false
Arguments for adopting a policy rule include
A) the time-inconsistency problem can lead to poor economic outcomes. B) discretionary policies pursue overly expansionary monetary policies to boost employment in the short run but generate higher inflation in the long run. C) policy makers and politicians cannot be trusted. D) all of the above.
Which of the following is true of an increase in quantity supplied of a given good?
a. It is represented by a rightward shift in the supply curve. b. It could result from a technological improvement. c. The price of a key resource used to produce the good may have decreased. d. It is caused by an increase in the price of the good. e. The price of an alternative good has increased.