Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward
B. Short-run aggregate supply shifting downward
C. Aggregate demand shifting rightward
D. Aggregate demand shifting leftward
Answer: B
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A nation can produce two products: steel and wheat. The table below is the nation's production possibilities schedule:Production Possibilities ScheduleProductABCDEFSteel012345Wheat100907555300Which of the following output-combinations is unattainable?
A. 4 units of steel and 55 units of wheat B. 95 units of wheat and 0 units of steel C. 30 units of wheat and 3 units of steel D. 1 unit of steel and 80 units of wheat
An employed individual is one who:
A) has been actively looking for jobs. B) was previously employed but has quit his job voluntarily. C) has a full-time or part-time paid job. D) is performing household chores for free.
Under the assumption of rational expectations, government fiscal and monetary policy changes are effective in the short run
A) all of the time. B) only when the short-run aggregate supply curve is the same as the long-run aggregate supply curve. C) only when the policy changes leave the position of the aggregate demand curve unaffected. D) only when the policy changes are unanticipated.
If the opportunity cost of capital is below the rate of return to capital in the perfectly competitive beauty salon industry,
A. resources will flow into the industry. B. beauty salon owners must be earning negative economic profit. C. the beauty salon industry cannot be in long-run equilibrium. D. beauty salon owners must be earning negative marginal revenue at their current levels of output.