The effects of a higher than expected price level are shown by
a. shifting the short-run aggregate supply curve right.
b. shifting the short-run aggregate supply curve left.
c. moving to the right along a given aggregate supply curve.
d. moving to the left along a given aggregate supply curve.
c
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One disadvantage of a floating exchange rate system compared to a fixed or managed float exchange rate system is
A) it does not allow the exchange rate to reflect demand and supply in the market. B) it is difficult to maintain. C) it can worsen inflation if domestic prices of imports rise quickly. D) it eliminates the possibility of depreciation during a recession.
At the federal level, transfer payments make up ________
A) about 98 percent of total outlays B) about half of total outlays C) less than one percent of total outlays D) the gap between government purchases and borrowing
Answer the following statements true (T) or false (F)
1. In the market for sushi, an increase in supply and a greater decrease in demand will cause both the equilibrium price and quantity to decrease. 2. In the market for sushi, an increase in the price of fish along with an increase in the popularity of sushi among consumers will cause the equilibrium quantity to increase, but the effect on the equilibrium price is indeterminate. 3. In the market for gasoline, if the change in demand due to the start of the summer driving season is greater than the change in supply due to disruptions in the refinery operations in the Gulf, then the equilibrium quantity will increase. 4. In the market for crude oil, if the change in demand due to falling price of natural gas (a substitute for oil) is greater than the change in supply due to disruptions in oil-well operations in the Middle East, then the equilibrium price of oil will decrease. 5. In the foreign exchange market, if Canadian companies import more products from the U.S., then the demand for Canadian dollars will increase.
The long-run average cost of production is defined as:
A. total cost divided by the quantity of output the firm chooses when at least one factor is fixed. B. total cost divided by the quantity of output the firm chooses when it can choose a production facility of any size. C. the quantity produced by a firm that can choose any size production facility. D. the quantity produced by a firm when at least one factor is fixed.