Which of the following is likely to reduce the total efficiency units of labor in an economy?
A) A decrease in the price of capital B) A recession that lowers aggregate demand
C) An increase in the price level D) An earthquake that kills several people
D
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Ron weighs 150 pounds. A graph relating Ron's weight on the vertical axis to Nancy's consumption of ice cream on the horizontal axis would be
a. a horizontal line at weight = 150 b. a horizontal line at weight = 0 c. a positively sloped line with decreasing slope d. a vertical line at weight = 150 e. the origin
Suppose a shift in aggregate demand creates an economic contraction. If policymakers can respond with sufficient speed and precision, they can offset the initial shift by shifting
a. aggregate supply right. b. aggregate supply left. c. aggregate demand right. d. aggregate demand left.
Answer the following statement(s) true (T) or false (F)
1. The price elasticity of supply measures the relative change in the quantity consumers demand that results from a change in price. 2. The price elasticity of supply is defined as the percentage change in the quantity supplied multiplied by the percentage change in price. 3. In a condition of perfectly inelastic supply, an increase in price will not change the quantity supplied. 4. In a condition of perfectly elastic supply, the elasticity of supply is 100. 5. Supply is usually more elastic in the short run than in the long run.
Which of the following is true when an economy produces at full employment, but consumers, government, businesses, and the foreign sector do not buy all the output?
A. Inventories are depleted. B. Unemployment falls. C. The price level rises. D. There is a recessionary gap.