The shift of the short-run aggregate-supply curve from SRAS1 to SRAS2
a. causes the economy to experience an increase in the unemployment rate.
b. causes the economy to experience stagflation.
c. could be caused by an outbreak of war in the Middle East.
d. could be caused by a decrease in the expected price level.
Answer: d. could be caused by a decrease in the expected price level.
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As long as wages and prices are flexible, an anticipated change in the money supply will lead to an increase in
A) the unemployment rate. B) industrial production. C) nominal income. D) real wages.
The nominal rate of interest is 4% and the anticipated rate of inflation is 5%. What is the real rate of interest?
A) 1% B) -1% C) 4% D) 9%
If a firm wished to maximize total revenues it should produce where
a. marginal cost is zero. b. marginal revenue is zero. c. marginal revenue is equal to marginal cost. d. marginal revenue is equal to price.
In a 2007 New York Times article Paul Krugman wrote that
a. the infant-industry argument works well as an argument in favor of protection for the U.S. steel industry. b. the negative effects of third world exports on U.S. wages may be increasing. c. there are social gains to the U.S. from free trade. d. high wage countries account for a growing share of U.S. imports of manufactured goods.