Which of the following could result in a recession?
A) a rise in the price of oil
B) an increase in investment
C) a tax cut
D) an increase in the quantity of money
E) an increase in government expenditures on goods and services
A
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Assume demand is held constant and supply increases. The result is a decrease in the equilibrium price and an increase in the equilibrium quantity of the item bought and sold
a. True b. False Indicate whether the statement is true or false
A downfall of the infant-industry argument is that
a. most industries need protection when they are mature, not when they are first established. b. the amount of the tariff is unlikely to have much impact on the success of an infant industry. c. once a tariff is granted, political pressure will likely force withdrawal of the tariff before the industry matures. d. once established, a tariff is politically difficult to remove.
A perfectly competitive firm is currently producing an output level where price is $10.00, average variable cost is $6.00, average total cost is $10.00, and marginal cost is $8.00. In order to maximize profits, this firm should
A) increase the market price. B) shut down. C) decrease its output. D) increase its output. E) not change its output — this firm is at its profit-maximizing position.
Exhibit 14-8 Aggregate demand and supply
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In Exhibit 14-8, if aggregate demand shifts from AD1 to AD2,
A. real GDP will increase from $3.0 to $7.0, and the price level will remain the same. B. real GDP will increase from $3.0 to $4.0, and the price level will remain the same. C. real GDP and the price level will both remain the same. D. real GDP will increase from $3.0 to $4.0, and the price level will increase from 100 to 140.