Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________. 
A. Rising; A
B. Falling; A; C
C. Falling; B: C
D. Rising; A; C
Answer: B
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The Pareto superiority concept _____
a. is equivalent to utilitarianism b. is equivalent to equilibrium in a perfectly competitive market c. compares two different states of the world d. looks at a state of the world and judges its superiority
The Big Tradeoff
What will be an ideal response?
Lou and Toby both live in a little town and are trying to sell their cars. Both of their cars have a blue book value of $10,000. Lou has an American car like most of the people in town own. Toby owns the only Bulgarian car in town. If people in their town are risk averse, then who will get closest to the blue book value for his car?
A. Lou will because American cars are better than Bulgarian cars. B. Both should get the same price for their cars because both cars have the same blue book value. C. Toby will because there is less uncertainty about the quality of Lou's car. D. Lou will because there is less uncertainty about the quality of Lou's car.
Workers whose wages tend to adjust slowly include all of the following EXCEPT:
A. union workers. B. unskilled, low wage workers. C. those with long-term contracts. D. movie stars, professional athletes, and rock stars.