Which of the following would cause a decrease in the short-run aggregate supply curve (SRAS)?
a. An advance in technology
b. An increase in the CPI
c. An increase in oil prices
d. An increase in the long-run aggregate supply curve (LRAS)
c
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The wealth effect explains the:
A. negative relationship that exists between consumer spending and overall price level. B. positive relationship that exists between consumer spending and overall price level. C. negative relationship that exists between consumer spending and overall asset valuation. D. positive relationship that exists between consumer spending and overall asset valuation.
Other things constant, a rise in which of the following would tend to increase the nominal interest rate?
A) The rate of time preference B) The risk premium C) The expected rate of inflation D) Any of the above.
What actions could be taken to stabilize output in response to a large decrease in U.S. net exports?
a. increase taxes or increase the money supply b. increase taxes or decrease the money supply c. decrease taxes or increase the money supply d. decrease taxes or decrease the money supply
In the market for used electric wheelchairs, there are high- and low-quality wheelchairs. Potential buyers cannot determine prior to purchase whether a wheelchair is high or low quality. The following statement that best describes what is likely to happen in this market is
A. the price of a used wheelchair will be very close to the value of a high-quality wheelchair, which will encourage people to sell high-quality wheelchairs. B. over time the market price of a used wheelchair will increase, as there is more of an incentive for owners of high-quality wheelchairs to sell than owners of low-quality wheelchairs. C. this is an example of adverse selection, as the buyer will have more information about the quality of the used wheelchair than will the seller. D. the price of a used wheelchair will be between the buyer and seller values for low-quality wheelchairs. This will encourage people to withdraw high-quality wheelchairs from the market.