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

Economics

You might also like to view...

Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.

A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary

Economics

When the government runs a budget surplus, it uses the funds to:

A. decrease public saving. B. decrease transfer payments. C. issue bonds. D. pay down outstanding debt.

Economics

A demand-pull inflation initially is characterized by...

What will be an ideal response?

Economics

A single-price monopoly maximizes profit by producing the quantity at which _____

A. its total revenue will be as large as possible B. marginal revenue equals marginal cost and setting the price equal to marginal revenue C. marginal revenue equals marginal cost and setting the price equal to marginal cost D. marginal revenue equals marginal cost and setting the price equal to the most people are willing to pay for that quantity

Economics