A positive temporary supply side shock will:
A. increase the level of potential output in the long run.
B. decrease the price level in the long run.
C. increase the price level in the long run.
D. have no effect in the long run.
Answer: D
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In the classical model, aggregate demand and aggregate supply will
A) not exist. B) intersect at the point of full employment. C) intersect at less than full employment. D) not intersect.
Consider the two graphs above. Suppose rising fuel costs makes it more expensive to move goods to and from warehouses. This would ________ the desired level of inventories, as depicted in graph ________
A) increase; B B) increase; A C) decrease; B D) decrease; A
A common example of indexing in the United States is: a. annual bonuses to workers
b. wage increases with seniority. c. 30-year fixed-rate mortgage loans. d. escalator clauses tied to the CPI in wage agreements.
Which controversy developed over a disagreement about how managers make profit maximizing production decisions?
a. Lester-Satlow b. Lester-Machlup c. Friedman-Lester d. Friedman-Phelps e. Kalecki-Gottheil