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 upward
C. Short-run aggregate supply shifting downward
D. Aggregate demand shifting leftward
Answer: B
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High inflation
A) makes money function less well as a store of value. B) lowers the price level. C) leads to a more correct allocation of resources. D) decreases uncertainty. E) makes it easier to use money as a standard of account.
An implication of the downward slope of the demand curve for a monopolistic competitive firm is that
A) its marginal revenue curve slopes upward. B) its marginal revenue curve is the same as the demand curve. C) its marginal revenue curve slopes downward but lies above the demand curve. D) its marginal revenue curve slopes downward but lies below the demand curve.
Social Security
A) has not been successful in reducing poverty among elderly Americans. B) is a system whereby current retirees are paid from taxes collected from current workers. C) has a greater number of workers per retiree today as compared to when it started. D) currently pays retirees benefits equal to what they paid into the system.
In the long run, an increase in the individual income tax rate with no change in the corporate profits tax may lead to ________ prices for the products of corporations and ________ prices for the products of partnerships and proprietorships.
A. lower; higher B. higher; lower C. higher; higher D. lower; lower