Refer to the information provided in Figure 28.7 below to answer the question(s) that follow.
Figure 28.7Refer to Figure 28.7. If the economy is at Point A, a sudden decrease in the price of oil without any change in the aggregate demand shifts the short-run Phillips curve (SRPC) from
A. SRPC3 to SRPC1.
B. SRPC1 to SRPC2.
C. SRPC2 to SRPC1.
D. SRPC1 to SRPC3.
Answer: D
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If a polluting producer is forced to pay a pollution charge, what is the effect on the supply and demand curves for the product?
A) The quantity supplied along the firm's supply curve increases. B) The firm's demand curve shifts leftward. C) The firm's supply curve shifts rightward. D) The firm's supply curve shifts leftward. E) Both the supply curve and the demand curve shift leftward.
In the above figure of a monopolistically competitive firm, in the long run after all industry adjustments have taken place, assuming that this firm's costs have not changed the firm will
A) produce more output at a higher price. B) produce less output at a lower price. C) produce the same quantity at the same price. D) Any of the above are possible.
If the economy's full-employment output is $9 trillion, actual output is $9 trillion, and the budget deficit is $20 billion, the deficit in this case is known as a
A. fiscal deficit. B. structural deficit. C. natural employment deficit. D. cyclical deficit.
If planned investment decreases as the interest rate increases, the size of the government spending multiplier will be
A) zero. B) larger than the government spending multiplier that would result if planned investment were independent of the interest rate. C) the same as the government spending multiplier that would result if planned, investment were independent of the interest rate. D) smaller than the government spending multiplier that would result if planned investment were independent of the interest rate