Refer to Figure 33-4. If the economy is in long-run equilibrium, then an adverse shift in aggregate supply would move the economy from
1. A to B
2. C to D
3. B to A
4. D to C
Answer: 2. C to D
You might also like to view...
For the firm in Figure 8.1, the profit-maximizing (loss-minimizing) price and level of output are:
A) P2 and Q2. B) P1 and Q1. C) P4 and Q1. D) P3 and Q1.
Usually, price elasticities of supply are
A) positive, because higher prices yield larger quantities supplied. B) considered short-run adjustments due to supply constraints. C) ordinarily a negative number based on the law of supply. D) an inverse relationship between price and quantity supplied.
You own a tract of trees and are deciding whether to harvest them now or next year. If you harvest them now, you can invest the proceeds and get a return of 5% on your investment. What should you do?
a. Let the trees grow as long as their dollar worth increases by more than 5% b. Let the trees grow c. Cut down the trees, and sell them d. Let the trees grow as long as their dollar worth increases by less than 5%
Figure 33-3
?
Given the situation in graph (1) in Figure 33-3, what can be expected to change in graph (1) when the economy’s self-correcting mechanism operates?
A. Aggregate demand increases. B. Aggregate demand decreases. C. Aggregate supply increases. D. Aggregate supply decreases.