Which of the following illustrates the law of demand?
A) Jorge buys fewer pencils at $2 per pencil than at $1 per pencil, ceteris paribus.
B) Chen buys more ice cream at $4 per half-gallon than at $3 per half gallon, ceteris paribus.
C) Karissa buys fewer sweaters at $50 each than at $35 each, ceteris paribus.
D) a, b, and c
E) a and c
E
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When actual output equals potential output and the inflation rate is equal to the expected rate of inflation, the economy is said to be in ________ equilibrium.
A. long-run B. recessionary C. short-run D. expansionary
A wage-price spiral occurs when
A. businesses boost production to try to stay ahead of higher-than-expected inflation. B. businesses boost prices and wages to try to stay ahead of higher-than-expected inflation. C. businesses reduce production to try to stay ahead of higher-than-expected inflation. D. businesses reduce prices and wages to try to stay ahead of higher-than-expected deflation.
Explain two different ways to determine the profit-maximizing level of output for a firm in a perfectly competitive market
What will be an ideal response?
If the Fed orders a contractionary monetary policy, describe what will happen to the following variables relative to what would have happened without the policy:
a. The money supply b. Interest rates c. Investment d. Consumption e. Net Exports f. The aggregate demand curve g. Real GDP h. The price level