The short-run aggregate supply curve can slope upward because
A. producers have misperceptions about the aggregate price level.
B. wages adjust immediately to changing economic circumstances.
C. prices adjust instantaneously.
D. prices are fixed in the short run.
Answer: A
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A high unemployment rate most likely means that there is a:
A. high rate of inflation in the economy. B. large GDP gap in the economy. C. low rate of interest in the economy. D. small GDP gap in the economy.
When regulators identify with the special interests of the industry they regulate, this behavior conforms with the
A) share-the-gains, share-the-pains hypothesis. B) rate-of-return hypothesis. C) lemon market hypothesis. D) capture hypothesis.
A market has the following characteristics: There is strategic decision making, output is somewhat restricted, there are few firms, and some long-run economic profits are possible. This market is:
A. perfectly competitive. B. a monopoly. C. monopolistically competitive. D. an oligopoly.
The advantage of imposing a tax on the producer that generates pollution is that
A) it will eliminate pollution. B) the government can keep tabs on exactly what is produced in an industry. C) a producer can pass the cost of pollution to the victims of the pollution. D) it forces the polluting producer to internalize the external cost of the pollution.