An increase in input prices will cause
A. AD to decrease (move to the left).
B. AD to increase (move to the right).
C. AS to decrease (move up and to the left).
D. AS to increase (move down and to the right).
Answer: C
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A. make normative statements; ignoring positive analysis B. make positive statements; ignoring normative analysis C. see the big picture; obscuring the details D. see the details; obscuring the big picture
Economics tells us which resource allocations are preferable
a. True b. False Indicate whether the statement is true or false
Monetary neutrality means that a change in the money supply
a. does not change real GDP. Most economists think this is a good description of the economy in the short run and in the long run. b. does not change real GDP. Most economists think this is a good description of the economy in the long run but not the short run. c. does change real GDP. Most economists think this is a good description of the economy in the short-run and the long run. d. does change real GDP. Most economists think this is a good description of the economy in the long run but not the short run.
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A. lower; potential B. higher; higher C. lower; higher D. higher; potential