In the short run, a price increase in the goods and services market measured by the CPI will:
A. increase the purchasing power of money.
B. improve producer profits and, thereby, induce suppliers to expand output.
C. increase resource prices, lower profits, and lead to a decline in output.
D. reduce the natural rate of unemployment.
Answer: B
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When the production of a good creates an external cost, to achieve the efficient quantity governments can set taxes (T) such that ________
A) MSC = MC + T B) MC = MSC + T C) T = MC + MSC D) MSC = MC - T
Why does a monopoly firm not have a supply curve?
What will be an ideal response?
Suppose the equilibrium price in a perfectly competitive industry is $15 and a firm in the industry charges $21. Which of the following will happen?
A) The firm's revenue will increase. B) The firm will sell more output than its competitors. C) The firm's profits will increase. D) The firm will not sell any output.
The average propensity to consume (C/Y) for the period 1970 to 1991 ranged between
a. 0 and - 0.80 b. 0 and 0.01 c. 0.65 and 0.80 d. 0.95 and 1.00 e. 1.20 and 1.50