Which of the following is correct if there is a favorable supply shock?
a. the short-run aggregate supply curve and the short-run Phillips curve both shift right.
b. the short-run aggregate supply curve and the short-run Phillips curve both shift left.
c. the short-run aggregate supply curve shifts right and the short-run Phillips curve shifts left.
d. the short-run aggregate supply curve shifts left and the short-run Phillips curve shifts right.
c
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The difference between price and average total cost is
A) total costs. B) marginal costs. C) average profit. D) an irrelevant quantity.
When quantity demanded responds strongly to changes in price, demand is said to be
a. fluid. b. elastic. c. dynamic. d. highly variable.
The "stimulus package"
What will be an ideal response?
If at the prevailing interest rate the demand for money is $3 trillion, and the supply of money is $2.5 trillion, then which of the following is true?
a. There is excess money supply, interest rates must fall in order to achieve an equilibrium in the money market. b. There is a shortage of money, interest rates must fall in order to achieve an equilibrium in the money market. c. There is a shortage of money, interest rates must rise in order to achieve an equilibrium in the money market. d. There is excess money supply, interest rates must rise in order to achieve an equilibrium in the money market.