The 1974-1975 recession was a result of a:
A) supply shock that caused a leftward shift of the LRAS curve
B) supply shock that caused a leftward shift of the SRAS curve
C) housing bubble collapse that caused a leftward shift of the aggregate demand curve
Answer: B) supply shock that caused a leftward shift of the SRAS curve
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Crowding out refers to a decline in ________ as a result of an increase in ________
A) government purchases; private expenditures B) government purchases; tax rates C) private expenditures; government purchases D) tax revenues; unemployment
In the above figure, which of the following statements is FALSE if the firm is operating at output level Q2?
A) The output is equivalent to an unregulated monopolist. B) Economic profits are positive. C) The price is lower than at an equivalent firm forced by regulators to charge ATC pricing. D) Average costs would be lowered by expanding output.
Keynesian economists believe that
a. prices are very flexible b. changes in the money supply could cause changes in velocity c. real GDP is constant in the short run d. the only motive for demanding money is the transactions demand motive e. the economy operates at full employment
When Microsoft establishes a distribution center in France, U.S. net capital outflow
a. increases because Microsoft makes a portfolio investment in France. b. decreases because Microsoft makes a portfolio investment in France. c. increases because Microsoft makes a direct investment in capital in France. d. decreases because Microsoft makes a direct investment in capital France.