Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward
B. Short-run aggregate supply shifting downward
C. Aggregate demand shifting rightward
D. Aggregate demand shifting leftward
Answer: B
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Which of the following is a period of decreasing output that is severe and long lasting?
a. business cycle b. expansion c. peak d. recession e. depression
At the consumer's optimum
a. the budget constraint will have a slope of MUx/Px. b. it is still possible for the consumer to increase his consumption of both goods. c. the indifference curve will intersect the budget constraint at the midpoint of the budget constraint. d. the slope of the indifference curve is equal to the slope of the budget constraint.
If the Canadian government raises it budget deficit, then Canada's net capital outflows will
a. increase, so its exchange rate will rise. b. increase, so its exchange rate will fall. c. decrease, so its exchange rate will rise. d. decrease, so its exchange rate will fall.
Answer the next question on the basis of the following information about a hypothetical economy.Full-time employed = 80 Part-time employed = 25 Unemployed = 15 Discouraged workers = 5 Members of underground economy = 6 Consumer price index = 110If the members of the underground economy are presently counted as part of the unemployed when in fact they are employed, the official unemployment rate is overstated by about
A. 6 percentage points. B. 0 percentage points. C. 2 percentage points. D. 5 percentage points.