Refer to the above figure. Suppose point A is the original equilibrium. If there is an increase in the money supply, the new long-run equilibrium is given by point
A. A.
B. B.
C. C.
D. D.
Answer: C
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A market in which the Herfindahl-Hirschman Index exceeds 1,800 is considered to be
A) competitive. B) not competitive. C) moderately competitive. D) purely competitive. E) either a monopoly or monopolistic competition.
The Fed raises the federal funds rate. Which of the following changes occurs most rapidly?
A) Exchange rate rises. B) Consumption expenditure decreases. C) Aggregate demand decreases. D) Real GDP growth decreases. E) Inflation rate decreases.
The United States' involvement in World War II caused
a. both the aggregate demand curve and aggregate supply curve to shift outward, causing GDP to increase and the price level to decrease b. both the aggregate demand curve and aggregate supply curve to shift inward, causing GDP to increase and the price level to decrease c. the aggregate demand curve to shift inward and the aggregate supply curve to shift outward, causing both GDP and the price level to increase d. the aggregate demand curve to shift outward and the aggregate supply curve to shift inward, causing both GDP and the price level to increase e. aggregate demand to initially shift out, then reverse, leaving the economy at equilibrium
This graph represents the cost and revenue curves of a firm in a perfectly competitive market.
According to the graph shown, if a firm is producing at Q3:
A. average total costs exceed the market price. B. the firm should expand production. C. marginal revenue is greater than marginal cost. D. profits are being maximized.