A permanent negative supply shock leads to ________ inflation ________
A) higher; in both the short and long runs
B) higher; in the short run but not in the long run
C) lower; in both the short and long runs
D) lower; in the short run but not in the long run
A
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Country A specializes in the production of automobiles and 45% of its population works in the automobile manufacturing industry. A sharp increase in world prices for automobiles led to a boom in the automobile manufacturing industry in Country A
However, the automobile manufacturers overestimated the demand for automobiles. This led to overproduction which resulted in a large stock of unsold cars. Which of the following is likely to happen in the near future? A) Investment in Country A will increase. B) The supply of credit in Country A will increase. C) Household consumption in Country A will increase. D) The unemployment rate in Country A will increase.
A perfectly competitive firm is producing at the point where its marginal cost equals its marginal revenue. If the firm boosts its output, its total revenue will
A) rise and its total variable cost will rise even more. B) rise and its total variable cost will rise, but not by as much. C) fall but its total variable cost will rise. D) fall and its total variable cost will fall, but not by as much.
The speculative demand curve for money is
a. downward sloping b. upward sloping c. vertical d. horizontal e. U-shaped
In deciding how many hours to work, Beulah will make a choice that maximizes her _______; that is, she will choose according to her preferences for leisure time and income.
A. budget constraint B. opportunity set C. utility D. production possibilities frontier