Starting from long-run equilibrium, a sharp drop in oil prices results in ________ output in the short run and ________ output in the long run.
A. lower; higher
B. lower; potential
C. higher; higher
D. higher; potential
Answer: D
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Refer to Figure 14.1. Other things equal, a decrease in taxes is best represented as a movement from
A) point Y to point Z. B) point Z to point X. C) point Z to point Y. D) point Y to point X.
Jose and Maria work at a restaurant. Jose can make either 10 pancakes or 4 waffles; Maria can make either 8 pancakes or 2 waffles. According to this scenario
A) Maria has the absolute advantage in making waffles B) Maria has the absolute advantage in making pancakes. C) Maria has the comparative advantage in making pancakes. D) Jose has the comparative advantage in making pancakes.
Double taxation of saving may
A. increase the saving rate. B. reduce the rate of economic growth. C. increase the rate of investment. D. increase the national debt.
Refer to the graphs below. In Graph A, a decrease in the price level from P1 to P3 will lead to:
In the graphs below, QP refers to the economy's potential output level.
A. A decrease in profits, an increase in real output, and a decrease in the unemployment rate
B. A decrease in profits, a decrease in real output, and a decrease in the unemployment rate
C. A decrease in profits, a decrease in real output, and an increase in the unemployment rate
D. An increase in profits, an increase in real output, and a decrease in the unemployment rate