Mauritius, an island off the coast of Africa, competes with other countries producing goods with low-skilled labor. In 2006, it was reported that its "...factories have been exposed to ... competition from China, India, and other Asian mass producers." As a result, "the main export industry has seen a 30% reduction in volume..." The decrease in exports will cause __________ and the price level will __________.
a) a downward shift in the AE curve; decrease as the AD curve shifts leftward in the short run
b) an upward shift in the AE curve; increase as the AD curve shifts rightward in the long run
c) a leftward shift in the AD curve; fall in the short run and rise in the long run
d) a leftward shift in the AD curve; rise in the long run as goods become more scarce.
c) a leftward shift in the AD curve; fall in the short run and rise in the long run
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Moving upward along the aggregate supply curve is equivalent to
A) moving downward along the short-run Phillips curve. B) shifting the short-run Phillips curve leftward. C) shifting the short-run Phillips curve upward. D) moving upward along the short-run Phillips curve. E) shifting the short-run Phillips curve rightward.
Labor unions benefit their members by
A) distributing income more equally among workers. B) helping them compete more effectively against employers. C) increasing the number of job opportunities available for employees. D) preventing or controlling competition among workers. E) promoting the trade they represent to assure an adequate supply of skilled workers.
Loans made in the federal funds market:
A. are made by the Federal Reserve System to the bank within 24 hours. B. are unsecured loans. C. are insured by the FDIc. D. are highly collateralized.
An increase in natural resources would presumably ______ the costs of production and ______ the economy’s sustainable rate of output.
a. decrease; increase b. decrease; decrease c. increase; increase d. increase; decrease