The discovery of coal mines in a country will cause:
a. the aggregate supply curve to shift rightward
b. the aggregate supply curve to shift leftward.
c. an upward movement along the aggregate supply curve.
d. a downward movement along the aggregate supply curve.
a
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The size of the effect of a given deposit of cash into a demand deposit account on the money supply is greater:
a. the greater the fraction of money people want to hold as currency and the greater the fraction of deposits banks want to hold as excess reserves. b. the greater the fraction of money people want to hold as currency and the smaller the fraction of deposits banks want to hold as excess reserves. c. the smaller the fraction of money people want to hold as currency and the greater the fraction of deposits banks want to hold as excess reserves. d. the smaller the fraction of money people want to hold as currency and the smaller the fraction of deposits banks want to hold as excess reserves.
The rule of rational choice holds that people will alter their behavior if ______.
a. expected marginal benefits outweigh expected marginal costs b. they can afford both the money costs and the non-money costs c. comparative advantages are greater than absolute advantages d. changes to their course of action are slow and incremental
Whenever an isoquant exhibits a diminishing marginal rate of technical substitution, the corresponding isoquants are:
A. concave to the origin. B. L-shaped. C. convex to the origin. D. linear.
Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C