According to the above figure, what will the price level be in the new long-run equilibrium?
A) Less than 100 B) 115 C) 100 D) 110
B
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According to the Federal Reserve, household wealth in the United States fell by more than $11 trillion in 2008
Predict the effect this decrease in wealth had on the equilibrium real wage and level of employment, and use a graph to support your answer.
Figure 6.1In Figure 6.1, the total consumer expenditures equal:
A. 200 B. 250 C. 50 D. 30
The government imposes a unit excise tax on bubble gum. What happens as a result?
A) The equilibrium quantity of bubble gum increases. B) At the original market price, there will be a bubble gum surplus so price decreases. C) At the original market price, there is a bubble gum shortage and so price rises. D) There will be no change in either the market price or equilibrium quantity as long as the excise tax rate is 5 percent or less.
The aggregate supply curve (short run) is upsloping because:
A. wages and other resource prices match changes in the price level. B. the price level is flexible upward but inflexible downward. C. per-unit production costs rise as the economy moves toward and beyond its full- employment real output. D. wages and other resource prices are flexible upward but inflexible downward.