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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In the figure above, if pizza production is restricted to 5,000 pizzas a day, the deadweight loss is
A) $45,000 per day. B) $12,500 per day. C) $22,500 per day. D) $90,000 per day. E) zero.
An economy recovering from a recession
A) moves up from its trough to a period of expansion. B) moves up from its peak to a period of expansion. C) moves down from its trough to a period of depression. D) moves down from its peak to a period of expansion.
A defining characteristic of an oligopoly is:
A. barriers to entry prevent newcomers to such an industry. B. firms in the industry know they are competing with a few large firms with market power. C. easy entry and exit prevent long-run profits from being possible. D. all firms sell a standardized product.
If V is constant, the rate of growth of M that is consistent with a stable price level is
A) zero. B) the rate of growth of PQ. C) the rate of growth of Q. D) the expected rate of inflation. E) none of the above