According to the misperceptions theory, when the price level falls below the expected price level,
A. the economy's SRAS curve shifts up.
B. the economy moves along its AD curve.
C. the economy moves along its SRAS curve.
D. the economy moves along its LRAS curve.
Answer: C
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Suppose the government's initial debt is $400 billion. If for the next three years the government runs deficits of $150, $125, and $200 billion, the government's additional debt at the end of the three years will be
A) -$50 billion. B) $50 billion. C) $475 billion. D) $900 billion.
Depreciation allowance ________ the taxes a firm must pay and ________ the net present value of an investment.
A) increases; increases B) increases; decreases C) decreases; decreases D) decreases; increases
Long-run elasticity of supply is defined as
a. percentage change in quantity demanded in the long run divided by percentage change in price. b. percentage change in price divided by percentage change in quantity demanded in the long run. c. percentage change in quantity supplied in the long run divided by percentage change in price. d. percentage change in price divided by percentage change in quantity demanded in the long run.
On an individual level, our selection of one career rather than another represents which of the following economic concepts?
a. productivity b. externality c. opportunity d. specialization