In the above figure, the short-run aggregate supply curve is SAS1. If the prices of resources fall, there is
A) an upward movement along SAS1.
B) a downward movement along SAS1.
C) a shift to SAS0.
D) a shift to SAS2.
D
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If aggregate demand is stable and there is economic growth, the economy will experience
A) secular depreciation. B) secular decline. C) secular deflation. D) secular degeneration.
The size of the deadweight loss, or excess burden, of a tax depends on the
A) amount of producer surplus but not the amount of consumer surplus because it is the producers who send the tax revenues to the government. B) strength of demand. C) strength of supply. D) elasticities of demand and supply. E) number of demanders and the number of suppliers.
We all use the services of speculators as information in reaching our own economic decisions
A) because speculators are aggressive about marketing the information they produce. B) because we all use prices, which are set by bids and offers based on predictions of the future. C) if we buy or sell commodities through an organized exchange. D) if we play the stock market.
A gain can be made by the holder of a call option when the current exchange rate
A) exceeds the exercise price. B) exceeds the forward price. C) is less than the futures price. D) falls to zero.