If a positive permanent supply shock were to occur, the resulting equilibrium would be a:
A. higher level of output at lower prices.
B. lower level of output and prices.
C. higher level of output and prices.
D. lower level of output at higher prices.
Answer: A
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Imagine a duopoly in which two firms, A and B, produce the monopoly profit-maximizing output and equally share the economic profit
If firm A increases its output, the market price ________ and total economic profit of the two firms combined ________. A) falls; decreases B) falls; increases C) rises; decreases D) rises; increases E) falls; does not change
The desired reserve ratio is 10 percent and banks have no excess reserves. Juliet deposits $300 in her bank. What is the maximum that Juliet's bank can now loan?
A) $3,000 B) $270 C) $30 D) $330 E) $300
Currently most developed countries meet or exceed the U.N.'s Millennium Aid Goal for donor country GDP.
Answer the following statement true (T) or false (F)
When comparative advantage is based on transferable factors, the law of one price tends to:
A. stabilize the advantage. B. amplify the advantage. C. erode the advantage away. D. make the advantage into an inherent comparative advantage.