The French production possibilities curve shifts to the right when there is
a. a decrease in the French capital stock
b. a decrease in the French labor supply
c. high unemployment in France during the previous period
d. only consumer goods production in France during the previous period
e. technological innovation in the production of French goods
E
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Refer to the above figure. Suppose the economy is in long-run equilibrium at point A, and the government initiates an expansionary monetary policy to increase aggregate demand
Which of the following is a TRUE statement concerning the differences between what happens when the central bank action is unanticipated and when it is anticipated? A) The new long-run equilibrium will be point C in either case. When the increase in aggregate demand is unanticipated, the economy moves to B in the short run, but when the increase in aggregate demand is anticipated, short-run aggregate supply shifts when the aggregate demand curve shifts, and the economy moves immediately to point C. B) The new long-run equilibrium when the increase in aggregate demand is unanticipated is point B while the new long-run equilibrium when the increase in aggregate demand is anticipated is point C. C) The new long-run equilibrium is point C in either case. When the increase in aggregate demand is unanticipated, the new short-run equilibrium is point B, but when the increase in aggregate demand is anticipated the new short-run equilibrium is point D. D) The new long-run equilibrium when the increase in aggregate demand is unanticipated is point B while the new long-run equilibrium when the increase in aggregate demand is anticipated is point A.
"External benefits lead to overproduction so that more than the efficient quantity is produced." Is the previous statement true or false?
What will be an ideal response?
Exhibit 10-4 Kinked demand curves
In Exhibit 10-4, the exhibit represents a kinked-demand oligopoly model. Suppose the current price is $50. If one firm in the oligopoly now attempts to raise price, all firms will:
A. follow along demand curve D1. B. follow along demand curve D2. C. ignore this price increase and cause the price-raising firm to move along D1. D. ignore this price increase and cause the price-raising firm to move along D2.
When an economist says that the demand for a product has increased, this means that:
A. consumers are now willing to purchase more of this product at each possible price. B. the product has become particularly scarce for some reason. C. product price has fallen and, as a consequence, consumers are buying a larger quantity of the product. D. the demand curve has shifted to the left.