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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When the labor market is at full employment
A) real GDP equals potential GDP. B) the price level is stable. C) the price level equals the potential price level. D) the short run aggregate supply curve is horizontal.
Carefully explain if the following statements are true, false, or uncertain
a. If average cost is increasing, marginal cost must be increasing. b. If there are diminishing returns, the marginal cost curve must be positively sloped. c. Marginal costs decrease as output increases because the firm can spread fixed costs over more units.
A year-long drought that destroys most wheat crops for the season would shift the:
A. short-run aggregate supply curve only. B. aggregate demand curve only. C. aggregate demand curve, and the short-run aggregate supply curve would shift in response. D. short-run aggregate supply curve and the long-run aggregate supply curve.
An excise tax is imposed on smartphones. If the elasticity of demand is 2 and the elasticity of supply is 1, we can predict that:
A. sellers will bear 2/3 of the tax burden. B. sellers will bear the full tax burden. C. consumers will bear 2/3 of the tax burden. D. consumers will bear the full tax burden.