In the long run, in a price-taker market, the price of a good is determined primarily by the
a. average total cost of producing it.
b. decision of buyers in determining how much they are willing to pay for the good.
c. elasticity of supply.
d. number of firms in the industry.
A
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Refer to Figure 16-5. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, and no fiscal or monetary policy is pursued, then at point B
A) the unemployment rate is very low. B) the economy is above full employment. C) firms are operating below capacity. D) income and profits are rising. E) there is pressure on wages and prices to rise.
The ratio of the percentage change in consumption of a good divided by the percentage change in income (as measured by GDP) is known as the
A) income elasticity of demand. B) income expansion path. C) demand elasticity equivalent. D) trade effectiveness.
Which of the following was not an export of the Southern colonies?
a. deerskins b. bulk unfinished iron c. tobacco d. rice e. All of the above were exports from the Southern colonies.
A central bank can reduce inflation by reducing money supply growth, but it necessarily does so at the cost of permanently raising the unemployment rate
a. True b. False Indicate whether the statement is true or false