An economy in which output has decreased and prices have increased would suggest that there has been a:
A. negative demand side shock.
B. negative supply side shock.
C. positive demand side shock.
D. positive supply side shock.
Answer: B
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As the real wage increases, assuming that the substitution effect dominates, then
a. individuals move to lower indifferent curves and consume less leisure. b. individuals move to higher indifferent curves and consume less leisure. c. individuals move to higher indifferent curves and consume more leisure. d. individuals stay on the same indifferent curve and consume more leisure.
One way to solve the problems caused by information asymmetry is:
A. screening. B. signaling. C. building a reputation. D. All of these are solutions to information asymmetry.
Which of the following is a flow variable?
a. the number of cars registered in the U.S. b. the number of unemployed workers this week c. your total net worth yesterday d. the government debt this year e. a salary of $4,000 per month
Why is the expected price level important?
What will be an ideal response?