A severe drought has devastated cocoa plants, causing an increase in the price of chocolate. In the market for chocolate chip cookies
A) a surplus will arise.
B) supply has decreased and price has increased.
C) quantity has decreased and price has decreased.
D) quantity demanded has increased.
Answer: B
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Suppose that IS and LM intersect at full-employment output. A rightward shift of IS will be followed by a __________ price level that shifts LM to the __________ in a return to full-employment
A) rising; right B) rising; left C) falling; right D) falling; left
The goal of expansionary fiscal policy with respect to output is to:
A. increase spending and shift aggregate demand to the right in an effort to reach full employment output. B. increase spending and aggregate demand to get back to an output level the government is comfortable with. C. decrease government spending in an attempt to get the private economy back on track. D. increase spending and shift aggregate demand to the left in an effort to reach full employment output.
A firm's advertising can help rivals
A) if it focuses on a general problem that the product addresses. B) if it focuses on a secret ingredient that only this firm possesses. C) if rivals do not advertise. D) if rivals advertise.
The highest post World War II unemployment rate occurred
A. in 2001. B. in 1982. C. in 2009. D. in 1974.