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 upward
C. Short-run aggregate supply shifting downward
D. Aggregate demand shifting leftward
Answer: B
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Monetarists view government intervention in the economy as
A) necessary to maintain full employment. B) unnecessary and potentially damaging. C) effective because it stimulates capital formation. D) leads to consistently higher employment and output.
The most reliable measure of market concentration is:
a. the Cost of Living index. b. the Herfindahl-Hirschman index. c. the Market index. d. the Market-Value weighted index. e. the Wholesale Price index.
Economic profit that stems from entrepreneurship reflects
a. market power achieved through the use of public policy that restricts entry into a market. b. the ability of some individuals to recognize and undertake economically beneficial projects that have gone unnoticed by others. c. windfall gains due to unanticipated changes in weather. d. the influence of special interest groups on the market process.
Which of the following provides the best explanation of why low-income countries generally remain poor?
a. Their institutional arrangements and policies often discourage productive activity and reduce the potential gains from specialization and exchange. b. They are oppressed by developed nations that benefit from the cheap goods available from countries with low wage rates. c. They are poorly endowed with natural resources, which are essential for long-term rapid growth. d. When the average income level is low, workers have little incentive to earn higher incomes.