Other things constant, a decrease in resource prices will lead to
a. reduced profits and a reduction in short-run aggregate supply.
b. increased profits and a reduction in short-run aggregate supply.
c. reduced profits and an increase in short-run aggregate supply.
d. increased profits and an increase in short-run aggregate supply.
D
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Why is it that if an industry is operating under conditions of internal scale economies then the resultant equilibrium cannot be consistent with the pure competition model?
What will be an ideal response?
Refer to the graph below, which shows the effect of ________ on the home economy
A) foreign inflation B) domestic inflation C) foreign deflation D) domestic recession E) foreign recession
In most developed countries, the largest and fastest growing component of government expenditure has been
a) national defense b) transfer payments c) interest on the national debt d) transportation expenditures e) the cost of maintaining the legal system
The borrowing rate is
A) the rate at which consumers and firms can borrow. B) a nominal interest rate. C) determined by monetary policy. D) a risk premium.