A fall in import prices or an increase in productivity ________
A) constitute a positive supply shock
B) typically leads to a rise in commodity prices
C) typically comes with a reduction in output
D) all of the above
E) none of the above
A
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Use the following information to answer the next question.C = A + .75(Y - T)A = $900I = $600G = $400T = $400NX = -$200What is the equilibrium level of real GDP?
A. $5,600 B. $8,000 C. $5,200 D. $7,200
If raising taxes or borrowing are your only two choices of financing current expenditures, which would you choose, and why, if you were in charge of setting policy?
What will be an ideal response?
A nonbinding price floor i. causes a surplus. ii. causes a shortage. iii. is set at a price above the equilibrium price. iv. is set at a price below the equilibrium price
a. (iii) only b. (iv) only c. (i) and (iii) only d. (ii) and (iv) only
If inventory levels are decreasing, then we should expect business firms to
a. decrease prices. b. decrease output. c. lay off workers. d. increase output.