In the fooling model, AD/SAS equilibria to the left of LAS are unstable because ________ nominal wages shift ________
A) falling, AD downward
B) falling, SAS downward
C) rising, AD upward
D) rising, SAS upward
B
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Refer to Figure 8.1. The Nash equilibrium is found where Charla plays ________ and where Mirna plays ________
A) Install; Install B) Install; Don't Install C) Don't Install; Install D) Don't Install; Don't Install
The Dutch Disease refers to a deadly outbreak of influenza that destroyed all international trade for the Netherlands in the 1960s
Indicate whether the statement is true or false
Suppose that a $5.50 price floor is imposed on a corn market whose equilibrium price was $4.50 per bushel. Which of the following will happen?
a. There will be an excess demand of corn at $5.50. b. The profits of all corn farmers will increase by $1 per bushel. c. There will be an excess supply of corn at $5.50. d. The equilibrium price of corn will fall below $4.50 per bushel. e. The excess supply at $5.50 will fall to zero as the equilibrium price increases to $5.50 .
To close a recessionary gap, the government can:
a. employ an expansionary fiscal policy that will shift the aggregate demand curve to the right. b. employ a contractionary fiscal policy that will shift the aggregate demand curve to the right. c. employ a contractionary fiscal policy that will shift the aggregate demand curve to the left. d. employ an expansionary fiscal policy that will shift the aggregate demand curve to the left.