A temporary embargo on oil from Saudi Arabia going in to the United States would
A. shift only the long-run aggregate supply curve to the left.
B. shift both the short-run and long-run aggregate supply curves to the left.
C. shift the long-run aggregate supply curve to the right.
D. shift only the short-run aggregate supply curve to the left.
Answer: D
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If firms maintain preset prices in the short run, then the primary cause of output gaps is changes in:
A. potential output. B. economy-wide spending. C. prices. D. capital and technology.
According to the intertemporal substitution effect, a fall in the price level will
A) decrease the real value of wealth, which increases the quantity of real GDP demanded. B) cause the interest rate to fall so that investment increases and the quantity of real GDP demanded increases. C) increase net exports, which causes the quantity of real GDP demanded to increase. D) increase the real value of wealth, which raises the interest rate so that the quantity of real GDP demanded decreases.
The human-capital theory explanation for why people invest in education has been challenged by a theory that suggests
a. schooling acts only as a signal of ability. b. humans cannot be considered "capital." c. productivity is not linked to wages. d. ability, effort, and chance matter more.
Which of the following factors affects consumers' decisions to buy goods or services:
A. Buying power B. Competition C. Labor costs D. Production costs