Which of the following will cause an outward (rightward) shift in the supply curve?
A. an increase in the price of labor input
B. a reduction in the price of the good
C. technological progress
D. an increase in the number of consumers
Answer: C
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What is the advantage of the government imposing an ad valorem tax over a specific tax when facing a monopoly?
What will be an ideal response?
Suppose a hefty rise in the demand for Mexican pesos creates a chronic shortage of this currency in the foreign exchange market. Which of the following steps should be adopted by the Mexican government to eliminate this shortage?
a. The government should impose a ban on Mexican exports. b. The government should devalue the peso. c. The government should print more pesos to increase its supply. d. The government should allow the peso to appreciate. e. The government should allow the peso to depreciate.
In the absence of high or volatile inflation, an increase in the price of oil:
A. can be confidently interpreted as meaning that oil producers are earning greater profit. B. can be confidently interpreted as meaning that the money supply has increased. C. can be confidently interpreted as meaning that oil has become more scarce. D. can be confidently interpreted as meaning that the velocity of money has increased.
Refer to the graph. An increase in the Security Market Line from SML 1 to SML 2 and an increase in the average expected rate of return of asset A from Y 1 to Y 2 would be explained by:
A. arbitrage only.
B. a restrictive monetary policy only.
C. both arbitrage and a restrictive monetary policy.
D. neither arbitrage nor a restrictive monetary policy.