The short-run industry supply curve in a perfectly competitive market is the horizontal sum of each firm's short-run supply curve
a. True
b. False
A
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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
Use the following table with data for a private closed economy (an economy with only a private sector and no international trade) to answer the next question.All figures are in billions of dollars.Expected Rate of ReturnInvestmentConsumptionGDP10%$0$400$4008100500600620060080043007001,00024008001,20005009001,400An increase in the real interest rate from 2% to 6% will
A. increase the equilibrium level of real GDP by $400 billion. B. decrease the equilibrium level of real GDP by $400 billion. C. increase the equilibrium level of real GDP by $300 billion. D. decrease the equilibrium level of real GDP by $200 billion.
Which of the following is an example of risk diversification?
A) an individual purchasing only IBM stock B) an insurance company writing earthquake insurance only for the Los Angeles area C) an individual investing all of her savings in a single, new firm D) a lumber mill purchasing trees from various forests across the western United States
In the above figure, a change in autonomous consumption to 100 would cause the consumption function to
A) become steeper. B) become flatter. C) shift down. D) shift up.