Suppose the economy is initially in long run equilibrium. Which of the following lead to an increase in price level and a decrease in real GDP in the short run?
A. decrease in health insurance premiums paid by firms raises the cost of employing labor
B. increase in govt transfer payments
C. increase in the cost of a key input like oil
D. sharp fall in stock market prices
Ans: D. sharp fall in stock market prices
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Managers can increase firm profits by:
A) increasing revenue only. B) decreasing costs only. C) increasing revenue and decreasing costs. D) none of the above.
The urban consumers that the CPI is based on does not include:
A. persons in prison. B. the unemployed. C. the retired. D. the CPI does not include any of these.
Middle-aged workers being paid more than their younger counterparts is likely due to
A. workers prefer delaying their earnings to as late in life as possible. B. firms using a delayed compensation scheme. C. the natural inverse relationship between age and experience. D. the implementation of a mandatory retirement age by the firm. E. more recent education and job training programs being more effective than older programs.
The size of the marginal propensity to save
What will be an ideal response?