Other things equal, demand-pull inflation results in output ________ and the price level ________.
A. increasing; increasing
B. decreasing; decreasing
C. increasing; decreasing
D. decreasing; increasing
Answer: A
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Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting downward C. Aggregate demand shifting rightward D. Aggregate demand shifting leftward
A perfectly competitive furniture-rental firm in Phoenix incurs an economic loss if the average total cost of each rental is
A) greater than the marginal revenue of each rental. B) less than the marginal revenue of each rental. C) equal to the marginal revenue of each rental. D) equal to the price of each rental. E) greater than the average variable cost of each rental.
In the above figure, the production of 75 ukuleles and 75 guitars is
A) efficient production. B) inefficient production. C) impossible production. D) full employment production.
An example of physical capital is:
A. a factory. B. a computer. C. a pen. D. All of the items are examples of physical capital.