A rise in the price of a substitute in production for a good leads to
A) an increase in the supply of that good.
B) a decrease in the supply of that good.
C) no change in the supply of that good; instead there is a change in the quantity supplied.
D) a decrease in the quantity of that good supplied.
E) no change in either the supply or the quantity supplied of the good.
B
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The long run
A) means a long period of time, always longer than a year. B) is a period of time in which all factors of production can be varied. C) is different for different firms. D) Both answers B and C are correct.
If you believe that the LM curve is vertical, what type of policy would you recommend to stimulate the economy?
A) An increase in government spending B) A reduction in government spending C) An increase in the money supply D) A reduction in the interest rate
In the above figure, the opportunity cost of moving from producing 75 guitars and 25 ukuleles to producing 25 guitars and 75 ukuleles is
A) 25 guitars. B) 75 ukuleles. C) 25 ukuleles. D) 50 guitars.
The Phillips curve represents the Fed's short-run choices between inflation and unemployment
a. True b. False