Inflation can be started by
A) a decrease in aggregate supply or a decrease in aggregate demand.
B) a decrease in aggregate supply or an increase in aggregate demand.
C) an increase in aggregate supply or an increase in aggregate demand.
D) an increase in aggregate supply or a decrease in aggregate demand.
E) an increase in aggregate demand or an increase in potential GDP.
B
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In the above figure, the shift in the supply curve from S to S2 might reflect
A) a decrease in the cost of the tomato sauce used to produce pizza. B) a decrease in the number of pizza producers. C) an increase in the price of a pizza. D) an increase in income if pizza is a normal good. E) an increase in the price of a good that is a substitute for consumers.
The "Made in the USA" campaign was popularized by unions in an effort to influence which determinant of demand?
A. Incomes B. Preferences C. Expectations of future prices D. Prices of related goods
An MPI of 0.4 indicates that for every 100 percent increase in domestic income:
a. there is a 40 percent increase in investment. b. there is a $40 increase in investment. c. there is a 40 percent decline in imports. d. there is a $40 increase in imports. e. there is a 40 percent increase in imports.
In early 2000s, oil prices were rising because of concern about the Iraqi invasion Kuwait and other situations, along with rapid growth in demand in the Far East. Prices eventually reached over $100 a barrel. How would most economists predict these high prices should affect the U.S. economy in terms of the AD/AS model?
A. Because oil is an important input in many production processes, the higher prices should shift the short-run aggregate supply curve down (to the right). B. Because oil is an important input in many production processes, the higher prices should shift the short-run aggregate supply curve up (to the left). C. They do not change anything, but are evidence of a shift in the aggregated demand curve to the right. D. They would have no effect because oil prices are a microeconomic phenomenon.