Which of the following is NOT a reason why natural GDP might fall as a result of a supply shock?
A) The production function shifts downward.
B) There might be a voluntary decline in the supply of labor in response to the decline in real wages.
C) The supply of labor is a function of the expected wage rate.
D) none of the above
C
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The ________ effect of a price change refers to the impact of a change in the price of a good on a consumer's purchasing power
A) income B) substitution C) ceteris paribus D) demographics
When a tax is imposed on a good for which both demand and supply are very elastic, a. sellers effectively pay the majority of the tax
b. buyers effectively pay the majority of the tax. c. the tax burden is equally divided between buyers and sellers. d. None of the above is correct; further information would be required to determine how the burden of the tax is distributed between buyers and sellers.
Which of the following is NOT a characteristic of a constant cost competitive industry? As the industry expands in the long run,
A. input prices remain constant. B. the number of firms remain constant. C. the cost of production remains constant. D. the price of the product remains constant. E. none of the above
The equation of exchange states that:
A. money supply multiplied by real output equals velocity. B. velocity multiplied by money supply equals the selling price times the quantity of actual output. C. money supply divided by velocity equals nominal GDP. D. money supply divided by velocity equals real GDP.