A positive temporary supply side shock will:
A. increase the level of potential output in the long run.
B. decrease the price level in the long run.
C. increase the price level in the long run.
D. have no effect in the long run.
Answer: D
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Refer to the figure above. What does the region ABDC indicate?
A) Economic profit B) Loss incurred by the producer C) Consumer surplus D) Deadweight loss
An increase in government spending might be an example of a ________ policy for the purpose of ________
A) monetary; lowering unemployment B) monetary; reducing inflation C) monetary; increasing saving D) fiscal; reducing inflation E) fiscal; lowering unemployment
Which of the following events would decrease producer surplus?
a. Sellers' costs stay the same and the price of the good increases. b. Sellers' costs increase and the price of the good stays the same. c. Sellers' costs decrease and the price of the good increases. d. All of the above are correct.
Assume product A is an input in the production of product B. In turn product B is a complement to product C. We can expect a decrease in the price of A to:
A. decrease the supply of B and decrease the demand for C. B. increase the supply of B and increase the demand for C. C. decrease the supply of B and increase the demand for C. D. increase the supply of B and decrease the demand for C.