The cost effect implies that
A. Higher costs are reflected in higher average prices.
B. The aggregate demand curve is downward-sloping.
C. The aggregate supply curve is linear.
D. Lower average prices result in greater quantity supplied.
Answer: A
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In situations where businesses who choose to discriminate because they are prejudiced are few in an industry, discrimination:
A. will be eliminated by the competitive market. B. will persist because customers will not give them patronage. C. will persist in an efficient market. D. None of these is true.
All of the following are properties of typical indifference curves except
a. higher indifference curves are preferred to lower ones. b. indifference curves are downward sloping. c. indifference curves do not cross. d. indifference curves are bowed outward.
The time inconsistency of monetary policy means that
a. once people have formed expectations of low inflation based on a promise by the central bank, the central bank is tempted to raise inflation to lower unemployment. b. at some times central banks think it is more important to keep unemployment low; at other times, they think it is more important to keep inflation low. c. monetary policy is not consistent across time because it is influenced by politics. d. monetary policy is not consistent across time because policymakers are incompetent.
The Federal Reserve Banks are bankers’ banks. Explain.
What will be an ideal response?