Based on the above figure, which of the following is TRUE?
A) At a price of $6, quantity demanded is equal to quantity supplied.
B) At a price of $4, quantity demanded is greater than quantity supplied.
C) At a price of $8, quantity demanded is less than quantity supplied.
D) All of the above answers are correct.
D
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The Keynesian revolution was based on the assumption of price and wage ________ and thus the need for an activist ________ policy
A) flexibility, monetary B) flexibility, fiscal C) stickiness, monetary D) stickiness, fiscal
The main attractive feature(s) of a negative income tax program is (are):
a. c and d. b. c, d, and e. c. it is simple. d. it avoids the stigma of hand-outs. e. it only subsidizes the unemployed.
Which term represents a situation in which all firms earn zero economic profits producing the output level where P = MR = MC and P = AC?
a. Perfect competition b. Marginal revenue c. Long-run equilibrium d. Shut-down point
Suppose that monetary policy becomes more expansionary, and as a result, the future rate of inflation is higher. Will this be good for the stock market?
a. Yes; the inflation will lead to higher wages, and this will be good for both the economy and the stock market. b. No; the inflation will lead to higher nominal interest rates, and this will reduce the present value of the future net earnings derived from stocks. c. Yes; the inflation rate will reduce the long-run rate of unemployment, and this will be good for the stock market. d. No; the expansionary monetary policy will lead to lower real interest rates, and this is generally bad for both the economy and the stock market.