If a positive permanent supply shock were to occur, the resulting equilibrium would be a:
A. higher level of output at lower prices.
B. lower level of output and prices.
C. higher level of output and prices.
D. lower level of output at higher prices.
Answer: A
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The long-run supply curve of an industry equals the industry’s
A. long-run marginal cost curve. B. the horizontal sum of all firms’ supply curves at any point in time. C. long-run average cost curve. D. long-run total variable cost curve.
The U.S. personal savings rate for the first quarter of 2012 dropped to its lowest level since the start of the recession. Americans stashed away 3.6 percent of personal income in the first quarter, down from 4
2 percent in the fourth quarter and a near-term peak of 6.2 percent in the second quarter of 2009. Which of the following could explain this drop in savings? A) a decrease in wealth from a fall in stock prices B) a rise in the real interest rate C) an increase in disposable income as the job market recovers D) a rise in consumer confidence that their incomes will be higher in the future
Suppose the law of diminishing marginal utility holds for coffee. As a person drinks more coffee during the day, the total utility he or she receives will:
A. increase faster and faster. B. fall steadily. C. remain constant. D. rise, but at slower and slower rates.
The ________ hypothesis states that poor countries are unable to save and invest enough to accumulate capital stock that would help them grow.
A. equitable investment B. no-country-left-behind C. global-redevelopment D. vicious-circle-of-poverty