A positive temporary supply side shock will:
A. increase the level of potential output in the long run.
B. decrease the price level in the long run.
C. increase the price level in the long run.
D. have no effect in the long run.
Answer: D
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If manager performance is easily observable then
A) profits will be maximized for the firm. B) the owner can directly reward the manager. C) the manager will attempt to manipulate the reported profit. D) the firm's stock price will go up.
Macroeconomics might study which of the following?
A) the causes of domestic unemployment B) decision making undertaken by firms C) decision making undertaken by households D) determinants of the prices of rare goods (e.g., diamonds)
In words, the equation of exchange says that
A) the total amount spent on final output equals the amount received for final output. B) the amount of money in circulation equals the velocity of the price level. C) changes in the money supply will have no impact on the amount spent on final output. D) when velocity equals 1, nominal GDP equals the price level.
The economic systems of the former Soviet Union, the People's Republic of China, and Cuba are best classified as:
a. traditional economies. b. command economies. c. market economies. d. decentralized economies.