Which of the following would be considered a negative real supply shock?
A) a relaxation of government environmental regulations
B) a permanent increase in the price of energy
C) a decrease in the money supply
D) a decrease in aggregate demand
B
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Zora can produce 4 quilts in a week and she can produce 1 corporate website in a week. Lou can produce 9 quilts in a week and he can produce 2 corporate websites in a week. Zora has the comparative advantage in quilts and the absolute advantage in neither good, while Lou has the comparative advantage in corporate websites and the absolute advantage in both goods
a. True b. False Indicate whether the statement is true or false
Smith says that if government purchases rise by $100 billion, the AD curve will shift to the right. Jones says that if government purchases rise by $100 billion, the AD curve will not shift to the right. It follows that
A) Smith believes there will be zero or complete crowding out and Jones believes there will be complete crowding out. B) Smith believes there will be incomplete or zero crowding out and Jones believes there will be complete crowding out. C) Smith believes there will be complete crowding out and Jones believes there will be zero crowding out. D) Both Smith and Jones believe there will be incomplete crowding out, although Jones believes there will be more incomplete crowding out than Smith believes there will be. E) none of the above
Why can cross price elasticity of demand be positive or negative, unlike the price elasticity of demand with respect to the item's own price?
What will be an ideal response?
The price paid by buyers in a market will increase if the government (i) increases a binding price floor in that market. (ii) increases a binding price ceiling in that market. (iii) decreases a tax on the good sold in that market
a. (ii) only b. (iii) only c. (i) and (ii) only d. (i), (ii), and (iii)