Refer to the graph shown. If the supply curve shifts from S1 to S2, the value of the dollar will:
A. decrease in response to excess supply equal to Q3 - Q1.
B. increase in response to excess demand equal to Q4 - Q2.
C. decrease in response to excess supply equal to Q4 - Q2.
D. increase in response to excess demand equal to Q3 - Q1.
Answer: C
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Refer to Figure 14-6 Use the decision tree to determine whether Pizza Hut should deter Domino's from entering the market for pasta salad. Assume that each firm must earn a 25% return on investment to break even. Explain Pizza Hut's decision process
What will be an ideal response?
The linkages of the interest-rate-based transmission mechanism of monetary policy are summarized as follows:
A) change in the money supply ? change in speculative balances ? change in transactions balances ? change in planned investment ? change in aggregate demand. B) change in the money supply ? change in planned investment ? change in government spending ? change in aggregate demand. C) change in the money supply ? change in interest rates ? change in planned investment ? change in aggregate demand. D) change in the money supply ? change in interest rates ? change in transactions balances ? change in government spending ? change in aggregate demand.
Chausiku’s country has seen its production possibilities curve shift down and to the left over the past five years. Which of the following has most likely affected Chausiku’s country during this period?
a. discovery of a major oil field b. a prolonged drought c. expansion of the nation’s highway system d. implementation of universal health care
The shapes of the curves in the AS/AD model are based upon the:
A. principle of opportunity cost. B. relationship between the price level and total output. C. principle of substitution. D. relationship between a single good and its price.