The statistical measure of a weighted average of prices of goods and services that firms produce and sell is known as
A. the producer price index (PPI).
B. the inflation rate.
C. the consumer price index (CPI).
D. the Gross Domestic Product (GDP) deflator.
Answer: A
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Assume a market that has an equilibrium price of $5. If the market price is set at $9, producer surplus:
A. rises for some producers because of the increased price. B. decreases for some producers because of fewer transactions taking place. C. Both A and B are true. D. Neither of these statements is true.
Say's Law
a. cannot be satisfied if there is excess supply or demand in individual markets in the long run b. ensures that every firm will sell all of its output c. can be satisfied even if there is a general overproduction or underproduction of goods in the economy d. is satisfied only if every market clears in the short run e. shows that the total value of spending in the economy will equal the total value of the output produced
??Exhibit 16A-2 Macro AD/AS Models
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?As shown in Panel (b) of Exhibit 16A-2, assume the economy adopts a classical nonintervention policy. Which of the following would cause the economy to self-correct?
A. ?Competition among firms for workers increases the nominal wage and SRAS shifts rightward. B. ?Long-run equilibrium will be established at Y1 and P2. C. ?Long-run equilibrium will be established at Yp and P3. D. ?Competition among unemployed workers decreases nominal wages and SRAS shifts rightward.
Suppose that today, consumers expect the price of bottled water to double in the future. Then today the bottled water's
A. supply curve will shift to the right. B. supply curve will shift to the left. C. demand curve will shift to the right. D. demand curve will shift to the left.