Use the following graph to answer the next question.
The short-run equilibrium for this economy is at ________.
A. point e
B. point f
C. point g
D. none of these points
Answer: C
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Which of the following results in an increase in the supply of a good or service?
A) a rise in the price of the good or service B) an increase in foreign imports of the good or service C) a fall in the price of the good or service D) a smaller number of sellers producing the good or service E) higher taxes imposed upon producers of the good or service
Refer to Figure 15-6. In the figure above, if the economy is at point A, the appropriate monetary policy by the Federal Reserve would be to
A) raise income taxes. B) raise interest rates. C) lower income taxes. D) lower interest rates.
In analyzing the decision to shut down in the short run we assume that the firm's fixed costs are
A) nonmonetary opportunity costs. B) sunk costs. C) implicit costs. D) capital costs.
The policy irrelevance proposition states that
A) only relatively large expected changes in monetary policy impact the economy. B) anticipated changes in monetary policy are ineffective in changing real GDP. C) only statements from the White House have impact on the economy. D) in the short run unanticipated changes in monetary policy are ineffective in changing real GDP.