If prices of goods and services are inflexible, then:
A.
A negative demand shock would lead to increased real GDP in the short run
B.
A positive demand shock would lead to increased real GDP in the short run
C.
A negative demand shock would have no short-run effect on real GDP
D.
There would be no short-run demand shocks
B.
A positive demand shock would lead to increased real GDP in the short run
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The number of firms in a monopolistically competitive industry means that
A. existing firms in the industry will make sure new firms do not enter. B. firms will try to set a common price. C. firms will not cooperate to set a pure monopoly price. D. firms will collude.
Which of the following is an example of an efficiency-equity trade-off faced by economic agents?
A) According to an article by in the American Journal of Public Health by Edward Kaplan and Michael Merson of Yale University School of Medicine, the federal government's current method of allocating HIV-prevention resources is not cost-effective. Instead of allocating resources to states in proportion to reported AIDS cases, resources should flow first to those activities that prevent more infections per dollar and then to less and less effective combinations of programs and populations until funds are exhausted, even if it means that some populations would be left without any prevention services. B) Concerned about the falling birth rate, the French government has pledged more money for families with three children, in an effort to encourage working women to have more babies. C) Some U.S. colleges are actively recruiting foreign students for their technology-based programs. D) All New York City art museums are considering adopting a free-admission policy for local residents one weekend per month.
Suppose the current price of a pound of steak is $12 per pound and the equilibrium price is $9 per pound. In this case, there is a
A) surplus, so the price falls and quantity supplied increases. B) surplus, so the price rises and quantity demanded increases. C) shortage, so the price rises and quantity demanded decreases. D) shortage, so the price falls and quantity demanded increases. E) surplus, so the price falls and quantity demanded increases.
Suppose that a more efficient way to produce a good is discovered, thus lowering production costs for the good. This will cause: a. an increase in supply, or a rightward shift of the supply curve
b. a decrease in supply, or a leftward shift of the supply curve. c. an increase in quantity supplied, or a movement down the supply curve. d. a decrease in quantity supplied, or a movement up the supply curve.