When the price level falls,
A) there is a movement upward along the AS curve.
B) both the potential GDP line and the AS curve shift leftward.
C) the AS curve shifts leftward but the potential GDP line does not shift.
D) the AS curve shifts rightward but the potential GDP line does not shift.
E) there is a movement downward along the AS curve.
E
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Positive analysis:
A. determines whether the consequences of a policy are desirable. B. recommends whether a policy should be implemented. C. aims at determining only the economic consequences of a particular policy. D. depends on the analyst's values.
The figure above shows the U.S. supply of labor curve. What was the affect of the decline in birth rates during the 1960s and 1970s on the supply of labor curve in the 1980s?
A) a rightward shift of the supply of labor curve B) the supply of labor curve became steeper C) a movement downward along the supply of labor curve from a point such as A to a point such as B D) a leftward shift of the supply of labor curve E) None of the above answers is correct because there was no change in the supply of labor curve.
A congress member concerned about ensuring vertical equity in taxation would be most likely to argue for obtaining government revenue through a
a. progressive tax on personal income. b. regressive tax on corporate income. c. sales tax. d. head tax.
Which of the following is a short-run decision?
A. Because of an increase in enrollment, the economics department hires two new professors. B. After a new classroom building is built, the economics department hires two new professors. C. Your college builds a new classroom building. D. The economics department buys new computers for the professors.