After a temporary adverse supply shock hits the economy, general equilibrium is restored by
A) a shift down and to the left of the IS curve.
B) a shift to the left of the FE line.
C) a shift up and to the left of the LM curve.
D) a shift down and to the right of the IS curve.
C
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Use the following statements to answer this question: I. The equal marginal principle may be used to characterize the maximum utility consumption decision even if the diminishing MRS assumption does not hold. II
The equal marginal principle implies that the MRS at the optimal consumption bundle is always equal to the price ratio. A) I and II are true. B) I is true and II is false. C) II is true and I is false. D) I and II are false.
By referencing events in the news or something from your personal experiences, describe one example of each of the five foundations of economics discussed in this chapter.
Five Foundations of Economics: Incentives Trade-offs Opportunity cost Marginal thinking The principle that trade creates value
Bushels Demanded Per MonthPrice Per BushelBushels Supplied Per Month45$57750473563686126167157Refer to the above data. Equilibrium price is:
A. $3. B. $1. C. $2. D. $4.
Most poor families pay _____ federal personal income tax.
A. no B. a little C. a substantial part of their incomes in