Which of the following is consistent with the general consensus about the shape of the short-run aggregate supply curve?
A. Horizontal at all production levels.
B. Horizontal until full employment is reached, and then vertical.
C. Vertical.
D. Horizontal, then upward-sloping, and ultimately vertical.
Answer: D
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
According to the Application, people in Morocco bring meteorites picked up in the desert to local dealers, who then sell them to the public through Websites. This process is a description of
A) a market system. B) a bureaucratic system. C) a barter economy. D) a centrally planned economy.
A gas station in the mountains of Oregon has a monopoly over the retail gas market within a 50-mile radius. The station decides not to price discriminate. As a result, all consumers will pay
A) the highest price each consumer is willing to pay. B) the lowest price possible. C) a single price. D) multiple prices. E) a price that depends on their willingness to pay.
If supply is perfectly elastic in a consumer goods market, a per unit tax will always be inefficient unless the market demand curve for consumers is perfectly inelastic.
Answer the following statement true (T) or false (F)