Both the long-run and short-run aggregate supply curves will shift when
A. they are both upward sloping.
B. the government increases defense spending.
C. an event occurs which is expected to last only a short period of time.
D. the endowments of the factors of production change.
Answer: D
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When the Federal Reserve reduces its target rate of inflation, it will set a ________ real interest rate at every inflation rate and the aggregate demand curve will ________.
A. lower; shift to the right B. higher; shift to the left C. lower; shift to the left D. higher; shift to the right
Limit pricing is a strategy used by a firm to
A) deter entry. B) enhance short run profits. C) raise its prices. D) lower its costs.
The Volumetric Ethanol Excise Tax Credit (VEETC) is a tax credit (which acts like a subsidy) for registered ethanol-gasoline blenders. Qualified blenders receive $0.51 for each gallon of pure ethanol they blend into gasoline
What statement is TRUE? A) With a subsidy, the price paid by consumers will be lower than without a subsidy. B) Without a subsidy, the quantity produced by blenders will be greater than the quantity demanded. C) With a subsidy, the equilibrium quantity produced will be lower than without a subsidy. D) With a subsidy, production will be efficient.
Which of the following would be counted in U.S. GDP?
a. The salary of an American professor teaching in England b. The value of a used U.S.-produced car purchased in the U.S. c. The value of a new U.S.-produced car purchased by a French citizen d. The value of a new French-produced car purchased by a U.S. citizen within in the U.S. e. The value of a General Electric corporate bond bought by a Japanese citizen