Which of the following explains why higher prices in the goods and services market measured by the CPI leads to an upward-sloping aggregate supply curve??
A. ?The higher prices will temporarily improve profit margins because the cost of wages and salaries are fixed in the short run.
B. ?The higher prices will reduce the purchasing power of the fixed quantity of money and, thereby, stimulate additional output.
C. ?The higher prices will expand the economy's resource base and, thereby, stimulate additional output.
D. ?The higher prices will improve technology and, thereby, stimulate additional output.
Answer: A
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Evidence to support the Ricardo-Barro effect would show that
A) government budget deficits have no effect on the real interest rate or investment. B) higher government budget surpluses decrease investment. C) higher government budget deficits decrease investment. D) higher government budget deficits raise the real interest rate. E) government budget deficits increase household consumption.
The Bureau of Labor Statistics would categorize a retiree who is not working as
A) unemployed. B) a discouraged worker. C) out of the labor force. D) employed.
In the above figure, the combination of personal computers and televisions shown by point w
A) is an efficient use of society's resources because it is below the production possibilities curve. B) is more desirable than point x because producing at point w does not put a strain on society's resources. C) is attainable but involves the inefficient use of some of society's resources. D) is beyond the capacity of society to produce.
Buyer Power Nora's Nicest Knick Knacks has sold a variety of products to hundreds of small retailers. Over time, she has added distributers who have a talent for finding more retailers for Nora. Now, over half of her sales go through just two of these
distributers. Rather than making periodic orders as stock gets low, these distributers make only a few large purchases each year. How can these aspects of her buyer relationships affect how much of the value she creates that she gets to capture?