An increase in the cost of an input will result in
A) a leftward shift in the firm's supply curve.
B) an upward shift of the firm's marginal cost curve.
C) a leftward shift of the market supply curve.
D) All of the above.
D
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Refer to Figure 10.3. A decrease in the real interest rate, with no other changes that affect aggregate expenditure, is best represented by ________ in panel (a) and ________ in panel (b)
A) a shift from AE3 to AE2; a shift from IS2 to IS1 B) a shift from AE2 to AE3; a shift from IS1 to IS2 C) a shift from AE1 to AE2; a movement from point A to point B D) a shift from AE1 to AE3; a movement from point A to point C
When the Fed practices contractionary monetary policy, the interest rate goes:
A. up, and the exchange rate will appreciate as a result. B. up, and the exchange rate will depreciate as a result. C. down, and the exchange rate will appreciate as a result. D. down, and the exchange rate will depreciate as a result.
Economists use abstract models because:
A. every economic situation is essentially the same, so specific details are unnecessary. B. every economic situation is unique, so it is impossible to make generalizations. C. they are useful for describing general patterns of behavior. D. computers have allowed economists to develop abstract models.
During times of financial prosperity, the number of people on public assistance ______, causing aggregate demand to ______.
a. decreases; decrease b. increases; increase c. decreases; increase d. increases; decrease