Refer to the information provided in Figure 12.4 below to answer the question(s) that follow.
Figure 12.4There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of S0 and D0.Refer to Figure 12.4. Assume consumer preference changes toward X and away from Y. Ceteris paribus, the likely change in capital flow in sector Y will cause the industry's short-run ________ curve to shift to the ________.
A. supply; left
B. supply; right
C. demand; right
D. demand; left
Answer: A
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If you have private information that you are a safer driver than your record indicates, you are likely to buy an insurance policy with
A) a higher than average deductible. B) a positive but lower than average deductible. C) an average deductible. D) no deductible.
A flat LM curve implies that
A) an increase in government spending will change output by a relatively small amount. B) a decrease in taxes will change output by a relatively small amount. C) changes in government spending and taxes will have a large multiple effect on output. D) A and B.
If the U.S. raised its tariff on tires, then at the original exchange rate there would be a
a. surplus in the market for foreign-currency exchange, so the real exchange rate would appreciate. b. surplus in the market for foreign-currency exchange, so the real exchange rate would depreciate. c. shortage in the market for foreign-currency exchange, so the real exchange rate would appreciate. d. shortage in the market for foreign-currency exchange, so the real exchange rate would depreciate.
Rational (political) ignorance refers to
A) some voters choosing not to vote in elections. B) the fact that some voters are not smart enough to be informed on political issues. C) the state of not acquiring information about politics and government because the costs of acquiring the information are greater than the benefits. D) political candidates deliberately saying "dumb" things during their campaign. E) none of the above