Say the market for cereal is initially in equilibrium when all the major newspaper published the findings from study that say that eating 2 cups of cereal each day significantly reduces the risk for a heart attack. Other things equal, the publication of these findings will:
A. decrease the market price of cereal.
B. decrease the market quantity of cereal.
C. increase the supply of cereal.
D. increase the quantity supplied of cereal.
Answer: D
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Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting downward C. Aggregate demand shifting rightward D. Aggregate demand shifting leftward
Use the following graph to answer the next question.
The short-run equilibrium for this economy is at ________.
A. point e B. point f C. point g D. none of these points
If the rate of inflation in a given time period turns out to be lower than lenders and borrowers anticipated, then the effect will be:
a. a redistribution of wealth from borrowers to lenders. b. a redistribution of wealth from lenders to borrowers. c. a net loss in purchasing power for lenders relative to borrowers. d. a net gain in purchasing power for borrowers relative to lenders.
Technological change and labor productivity are negatively related.
Answer the following statement true (T) or false (F)