Assume that the economy is in long-run equilibrium. A shift in the aggregate demand curve will change
A) only the price level in the long run
B) only the output level in the long run
C) both the price level and the output level in the long run
D) neither the price level nor the output level in the short run
E) only the price level in the short run and only the output level in the long run
Ans: A) only the price level in the long run
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Publishers charge much higher prices for a book in hardcover than for the same book in paper cover because
A) the demand for hardcover books is less elastic at the same price. B) the marginal cost of attaching hardcovers is very high. C) there are larger sunk costs in the production of hardcover editions. D) they have less bargaining power against bookstores in marketing paperback editions. E) they want to subsidize students.
Consider the following statement, "The Federal Reserve fights recessions by increasing the money supply so people will have more money to spend." What is wrong with the statement and how can it be corrected?
What will be an ideal response?
Unemployment that develops as old industries die off is known as ________
A) cyclical unemployment B) structural unemployment C) frictional unemployment D) voluntary unemployment
Core competency occurs when: a. a business focuses on a wide range of products rather than a few products. b. a business focuses on one or few products rather than a wide range of products. c. a business sells products at a high price
d. a business is merged with another profit-making business.