Assume that steel is used to produce monkey wrenches. Ceteris paribus, if the price of steel rises, then
A. There will be a leftward movement along the initial supply curve for monkey wrenches.
B. The supply curve for monkey wrenches will shift to the right.
C. The supply curve for monkey wrenches will shift to the left.
D. There will be a rightward movement along the initial supply curve for monkey wrenches.
Answer: C
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Which of the following best illustrates the concept of derived demand?
a. A decrease in the price of glass causes the demand for plastic to decrease. b. An increase in the demand for bread leads to an increase in the demand for flour. c. A decrease in the price of air travel leads to an increase in the quantity demanded of air travel. d. An increase in the demand for peanut butter leads to an increase in the demand for jelly.
Which of the following is true? a. Purchases of stock are included as part of investment in the national income accounts. b. Fixed investments include all spending on capital goods, as well as residential construction. c. Investment spending is the least volatile category of GDP
d. All of the above are true.
When the rate of growth of per capita income of poorer countries is higher than that of richer countries, it leads to economic convergence
a. True b. False Indicate whether the statement is true or false
Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; lower; potential C. recessionary; lower; lower D. expansionary; lower; potential