]Which of the following describes what would happen after a positive supply shock such as a decrease in world oil prices?
a. An upward shift of the aggregate supply curve as unit costs increase, followed by a gradual decrease in the wage as employment decreases, leading to a downward shift of the aggregate supply curve.
b. A downward shift of the aggregate supply curve as unit costs decrease, followed by a gradual increase in the wage as employment increases, leading to an upward shift of the aggregate supply curve.
c. An upward shift of the aggregate supply curve as unit costs increase, followed by a gradual decrease in the wage as employment decreases, leading to an upward shift of the aggregate supply curve.
d. A downward shift of the aggregate supply curve as unit costs decrease, followed by a gradual decrease in the wage as employment decreases, leading to a downward shift of the aggregate supply curve.
e. An upward shift of the aggregate demand curve.
B
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The Ricardo-Barro effect of a government budget deficit refers to
A) a change in private savings supply. B) a large crowding out effect from a government budget deficit. C) a large crowding out effect from a government budget surplus. D) the international impact of government deficits.
An expected future increase in the price of gasoline may
A) increase the demand for gasoline now. B) decrease the demand for gasoline now. C) increase the supply of gasoline now. D) make gasoline an inferior good.
A change in the price of a good causes
A) an increase in supply. B) a decrease in supply. C) an increase in demand and a decrease in supply. D) a change in quantity supplied.
If the price of potato chips increases, other things constant, demand for potato-chip dip will
a. not change; only quantity demanded will change b. increase because the goods are substitutes c. decrease because the goods are substitutes d. decrease because the goods are complements e. increase because the goods are complements