Which of the following conclusions is not supported by the Three-Sector-Model?
a. A decrease in borrowing causes the real risk-free interest rate to fall and equilibrium quantity of real loanable funds to fall.
b. An increase in the supply of a nation's real loanable funds reduces the real risk-free interest rate and increases the equilibrium quantity of real loanable funds.
c. An increase in a nation's demand for goods and services within the intermediate range results in an increase in the real GDP and a higher GDP Price Index.
d. An increase in the value of a nation's currency encourages domestic exports and discourages imports.
e. All of the above are supported by the Three-Sector Model.
.D
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An increase in supply, with no change in demand, will lead to ______ _ in equilibrium quantity and ________ in equilibrium price.
A) an increase; an increase B) an increase; a decrease C) a decrease; an increase D) a decrease; a decrease
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
When a person does NOT have to pay the full costs for using a scarce resource, then there is
A. an opportunity cost in the activity for the person but not for society. B. a negative externality. C. a positive externality. D. an underproduction of a good.
Assume a perfectly competitive firm is producing 300 units of output, P = $10, ATC of the 300th unit is $11, marginal cost of the 300th unit = $10, and AVC of the 300th unit = $9. Based on this information, the firm is:
A) earning an economic profit of $300. B) earning an economic profit of $600. C) incurring a loss of $300 and should shut down. D) incurring a loss of $300, but should continue to operate in the short run.