An adverse supply shock will shift short-run aggregate supply
a. right, making prices rise.
b. left, making prices rise.
c. right, making prices fall.
d. left, making prices fall.
Ans: b. left, making prices rise.
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Assume that a combination of 10 bottles of wine and 2 cartons of milk lies on a consumer's budget constraint. If the price of one bottle of wine is $10, and one carton of milk is $1, what is the consumer's income?
A) $100 B) $20 C) $120 D) $102
If the price of grapefruit rises, the substitution effect due to the price change will cause
A) a decrease in the demand for oranges, a substitute for grapefruit. B) a decrease in the quantity of grapefruit demanded. C) a decrease in the quantity of grapefruit supplied. D) a decrease in the demand for grapefruit.
Why are U.S. government securities referred to as a bank's secondary reserves?
A) Their current market value may count toward meeting a bank's legal reserve requirements. B) They are very liquid. C) Banks are legally required to hold a certain minimum amount of these securities. D) They are the same thing as vault cash.
Which statement is true?
A. Income is more evenly distributed along curve X than curve Y.
B. Income is more evenly distributed along curve Y than curve X.
C. Income is equally distributed along curves X and Y.
D. It is impossible to determine income distribution by observing these curves.