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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Imports are:
A) positively related to income in the rest of the world and currency appreciation. B) positively related to income in the rest of the world and currency depreciation. C) positively related to domestic income and currency appreciation. D) positively related to domestic income and currency depreciation.
The government is deciding where to put a $1 tax-either in a market with elastic supply and demand curves, or a market with inelastic supply and demand curves. If their aim is to raise the most revenue with the smallest deadweight loss, where should the tax be placed?
A. In the market with elastic supply and demand curves B. In the market with inelastic supply and demand curves C. It is impossible to say without more information D. Since the burden is shared, it doesn't matter in which market it is placed
Sticky wages and input prices can explain why profits change along a short run aggregate supply curve
a. True b. False Indicate whether the statement is true or false
In the figure below, $40,000 for certain is as desirable as $47,000 with risk.
A. True
B. False
C. Uncertain