If a hurricane were to wipe out the majority of the eastern seaboard in the United States, it would likely cause a:
A. short-run supply shock.
B. long-run supply shock.
C. long-run demand shock.
D. short-run demand shock.
Answer: B
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Money’s principal function is to serve as a
A. standard for making loans. B. standard for credit reporting. C. medium of exchange. D. method for storing wealth.
The U.S. is able to maintain a large trade deficit because:
A. it is balanced by a large capital surplus. B. when the business cycle is in a boom, it will be a trade surplus. C. it is balanced by a large capital deficit. D. None of these statements is true.
Merger guidelines developed by the U.S. Department of Justice and the Federal Trade Commission use the Herfindahl-Hirschman Index as a measure of concentration. This index measures concentration in an industry by
A) adding up the market shares of all firms in the industry, squaring this number and then dividing by the number of firms in the industry. B) squaring the market shares of each firm in an industry and then adding up the values of the squares. C) determining the market shares of the four largest firms in the industry, but unlike the concentration ratio, the Index includes sales in the United States by foreign firms. D) squaring the four-firm concentration ratio of the industry and dividing this number by the total number of firms in the industry.
When Fed policy is being used to offset an inflationary gap, which of the following variables increases as a result? a. Aggregate demand. b. Investment
c. Net Exports. d. Interest rates.