A perfectly elastic supply curve
a. has no relevance, since real-world supply curves are never perfectly elastic
b. is a horizontal straight line
c. is a vertical straight line
d. is an upward-sloping straight line
e. is not a straight line
B
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Assume that the graphs show a competitive market for the product stated in the question below.
Select the graph above that best shows the change in the market following a reduction in the tax placed on the suppliers in the market.
A. graph (1) B. graph (2) C. graph (3) D. graph (4)
As a result of the financial crisis, checkable deposits:
A) became a smaller portion of overall liabilities B) experienced little change C) hit a new record high in terms of the percent of liabilities D) nearly doubled in terms of the percent of liabilities
Why do negative supply shocks present such a difficulty for the Federal Reserve?
a. the Fed can choose to fight the rising price level, but this will result in lower unemployment. b. the Fed can choose to fight the rising unemployment, but this will result in an even lower price level. c. the Fed can choose to fight the falling unemployment, but this will result in an even higher price level. d. the Fed can choose to fight the rising unemployment, but this will result in an even higher price level. e. the Fed can choose to fight the rising unemployment, but this will result in higher taxes.
Here is a consumption function: C = C0 + MPC(Yd). If consumption is $3,300, MPC =0.85, and disposable income is $2,100, what does autonomous consumption equal?
A) $899.15 B) $450 C) $1,515 D) $4,785 E) none of the above