A temporary decrease in the price of oil would be considered a:
A. long-run supply shock.
B. demand shock.
C. short-run supply shock.
D. The changing price of oil would not affect any of these.
Answer: C
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All of the following represent differences between stocks and bonds except
A) the future growth of a stock is more uncertain than the payments of a bond. B) differences of opinion about a stock's future may vary considerably but there is less difference about a bond's future. C) bonds represent partial ownership in a firm but stocks do not. D) a stock can possibly pay dividends forever, but bonds have a fixed number of payments.
Regarding unemployment, the classical model implies that
A) unemployment always exists. B) unemployment cannot exist. C) voluntary unemployment is zero, but involuntary unemployment often is fairly high. D) only voluntary unemployment exists.
Suppose Jo's savings after working for 2 years is $90,000 . Assuming she saves all of her income and the rate of growth of her income is constant at 10 percent over the 2-year period, her initial annual income must have been around _____
a. $49,630 b. $36,980 c. $65,897 d. $74,380
Other things equal, if the prices of a firm's variable inputs were to fall:
A. one could not predict how unit costs of production would be affected. B. marginal cost, average variable cost, and average fixed cost would all fall. C. marginal cost, average variable cost, and average total cost would all fall. D. average variable cost would fall, but marginal cost would be unchanged.