If the money supply grows 7% during the year, and people expected the money supply to grow by 5%, what happens to the short-run aggregate supply curve, according to the misperceptions theory?
A. It shifts up.
B. It shifts down.
C. It doesn't shift.
D. It shifts down unless Ricardian equivalence holds, in which case it doesn't shift.
Answer: B
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A market demand curve is
A. upward sloping. B. perfectly inelastic. C. perfectly elastic. D. downward sloping.
Attractive landscaping increases the property values of surrounding homes, creating a marginal benefit. The figure above represents the market for monthly landscaping contracts
a) What is the marginal social benefit of the 40th contract? Of the 60th contract? b) What is the marginal private benefit of the 40th contract? c) What is the marginal external benefit of the 40th contract? d) What is the unregulated competitive equilibrium price and quantity? e) What is the efficient quantity? f) What is the amount of the deadweight loss?
__________________ —a term referring to the activities that businesses can perform to take advantage of economies of scale.
a. Scarcity b. Division of labor c. Core competency d. Specialization
If the government wishes to maintain a balanced budget during a recession, it must
A. increase taxes, decrease transfer payments, and/or decrease government spending. B. decrease taxes, decrease government spending, and/or decrease transfer payments. C. decrease taxes, increase transfer payments, and/or decrease government spending. D. increase taxes, increase government spending, and/or increase transfer payments.