If point A occurs chronologically before point B, then this graph could represent
a. a decrease in aggregate demand with a decrease in long-run and short-run aggregate supply
b. a decrease in aggregate demand with constant long-run and short-run aggregate supply
c. constant aggregate demand with a decline in long-run aggregate supply.
d. an increase in aggregate demand with constant long-run and short-run aggregate supply
e. constant aggregate demand with a decline in short-run aggregate supply.
Answer: b. a decrease in aggregate demand with constant long-run and short-run aggregate supply
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a. Changing reserve requirements b. Open market operations c. Changing the discount rate d. Moral suasion
In a competitive price-searcher market, the firms will
a. be able to choose their price, and the entry barriers into the market will be low. b. be able to choose their price, and the entry barriers into the market will be high. c. have to accept the market price for their product, and the entry barriers into the market will be low. d. have to accept the market price for their product, and the entry barriers into the market will be high.
When price is below average variable cost, a firm in a competitive market will
a. shut down and incur fixed costs. b. shut down and incur both variable and fixed costs. c. continue to operate as long as average revenue exceeds marginal cost. d. continue to operate as long as average revenue exceeds average fixed cost.
For the 1952-2014 period in the United States, output per worker hour
A. showed the largest increase during the 1980s. B. fluctuated around an upward trend. C. increased at a constant rate. D. decreased during the 1960s.