Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as 
A. long-run aggregate supply shifting leftward
B. Short-run aggregate supply shifting upward
C. Short-run aggregate supply shifting downward
D. Aggregate demand shifting leftward
Answer: B
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A) Classical; will B) Classical; may not be able to C) Keynesian; will D) Keynesian; may not be able to
The abnormal net income model defines the market value of a firm
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What fraction of this tax is borne by the workers?
Suppose the supply of labor is W – t = 10H, where W is the gross wage, t is the tax (in dollars), and H is labor hours. The demand for labor is W = 120 – 2H. a) 1/6 b) 2/6 c) 3/6 d) 4/6 e) 5/6
An increase in aggregate demand in the long run will most likely result in _____
Fill in the blank(s) with the appropriate word(s).