A contractionary monetary policy ________.
A. shifts the aggregate supply curve to the left
B. is used when the inflation rate is high
C. is designed to increase aggregate demand
D. can reduce the length of a recession
Answer: B
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If it costs a firm $10 to produce a good and the same good sells for $7 abroad, then this firm is engaging in
A) profit maximization. B) price discrimination. C) price differentiation. D) dumping.
A leftward shift of a supply curve is called a(n):
a. decrease in demand. b. increase in supply. c. decrease in supply. d. increase in quantity supplied. e. decrease in quantity supplied.
If the price of inputs rises and consumer expectations about future economic activity worsens:
a. Aggregate demand and aggregate supply rise. b. Aggregate demand and aggregate supply fall. c. Neither aggregate demand nor aggregate supply change. d. Aggregate demand rises, and aggregate supply falls. e. None of the above.
For each pair of items below determine which product would have the higher price elasticity of demand (in absolute value)
a. Insulin for a diabetic or aspirin for someone suffering a headache. b. A new Whirlpool 27 cu.ft. side-by-side refrigerator or electricity to power your all-electric home. c. A can of Red Bull or soft drinks in general. What will be an ideal response?