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; B; C
B. Falling; A; C
C. Falling; A; B
D. Rising; A; C
Answer: D
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If an economy keeps increasing its capital stock, then over time its production possibilities curve will
a. remain unchanged but more capital goods will be produced b. shift outward c. shift inward d. disappear because scarcity will eventually be overcome e. remain unchanged, but production will occur outside (exterior to) the curve
As more firms are attracted to an industry, the supply curve can be expected to shift to the right
a. True b. False Indicate whether the statement is true or false
Which of the following is correct?
a. The classical dichotomy separates real and nominal variables. b. Monetary neutrality is the proposition that changes in the money supply do not change real variables. c. When studying long-run changes in the economy, the neutrality of money offers a good description of how the world works. d. All of the above are correct.
In which of the following situations will market clearing price decrease and the equilibrium quantity increase?
A. an increase in demand with no change in supply B. an increase in supply with no change in demand C. a decrease in supply with no change in demand D. a decrease in demand with no change in supply