Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward
B. Short-run aggregate supply shifting downward
C. Aggregate demand shifting rightward
D. Aggregate demand shifting leftward
Answer: B
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Firms discount future profits at the interest rate r because
A) it is the interest rate on their debt. B) it is the same rate as for households. C) Ricardian equivalence holds. D) it has to equal the marginal productivity of capital in equilibrium.
If the government were to reduce its spending, it would be enacting:
A. contractionary fiscal policy. B. expansionary fiscal policy. C. a budgetary crisis intervention. D. expansionary budgetary policy.
Which of the following is false? a. A Nash equilibrium can be a dominant strategy
b. A Nash equilibrium maximizes a player's welfare, given the actions of its competitor, while a dominant strategy maximizes a player's welfare, regardless of the behavior of its competitor. c. A Nash equilibrium is just another name for a dominant strategy. d. A Nash equilibrium is a self-enforcing equilibrium.
Because private owners are held responsible for damages their property causes to the property of others, private owners have
a. a strong incentive to take steps to reduce the chance that they will harm the property of others. b. a strong incentive to use their property now rather than conserving it for the future. c. little incentive to take good care of the property. d. little incentive to consider the harm their property may do to the property of others.