Refer to Figure 10.1. If the level of real GDP is initially Y3, firms will ________ production until equilibrium is reached at ________
A) increase; Y3
B) decrease; Y3
C) increase; Y1
D) decrease; Y1
C
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In the case of an increase in government spending where the price level varies while the money wage is fixed, output
a. rises and prices fall by more than if the price level was fixed. b. falls and price rise by more than if the price level was fixed. c. rises by more and the price level rises by less than if the price level was fixed. d. and the price level are fixed. e. rises and prices fall by more than if the price level was fixed.
A movie theater can increase its profits through price discrimination by charging a higher price to adults and a lower price to children if it
a. can prevent children from buying the lower-priced tickets and selling them to adults. b. has some degree of monopoly pricing power. c. can easily distinguish between the two groups of customers. d. All of the above are correct.
A bank currently has checkable deposits of $100,000, reserves of $30,000, and loans of $70,000 . If the required reserve ratio is lowered from 20 percent to 15 percent, this bank can increase its loans by:
a. $15,000. b. $10,000. c. $75,000. d. $ 0. e. $5,000.
Exhibit 2 shows that before trade, the producer surplus equaled ______; after trade, the producer surplus ______.
a. a + b + c; expands to a + b + c + d
b. d; expands to b + c + d
c. e + f; expands to b + c + d + e + f
d. a + b + c; expands to a + b + c + e + f