Suppose a tax cut affected aggregate demand and aggregate supply. The shift in aggregate supply would make the
a. price level and real GDP change by more than otherwise.
b. price level change by more than otherwise and real GDP change by less than otherwise.
c. price level change by less than otherwise and real GDP change by more than otherwise.
d. price level and real GDP change by more than otherwise.
c
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Refer to Figure 14.1. Other things equal, a decrease in the target inflation rate is best represented as a movement from
A) point A to point B. B) point C to point B. C) point A to point C. D) point B to point C.
Sectoral shifts in demand for output
a. create structural unemployment. b. immediately reduce unemployment. c. increase unemployment due to job search. d. do not affect demand for labor.
Specialization can occur because
A. governments pass laws that require it. B. varying skills differentiate workers. C. managers and laborers share job tasks. D. absolute advantage creates specialization among laborers.
In the short run, the price at which a firm's total revenues equal its total costs is
A) a point of positive profits. B) a no return price. C) the short-run shutdown point. D) the short-run break-even point.