An economy in which output has decreased and prices have increased would suggest that there has been a:
A. negative demand side shock.
B. negative supply side shock.
C. positive demand side shock.
D. positive supply side shock.
Answer: B
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From the late 1800s until the start of World War I, the international financial system used the U.S. dollar as the key reserve currency, and featured fixed exchange rates in terms of the U.S. dollar. The U.S. government stood ready to convert foreign holdings of dollars into gold at a rate of $35 per ounce
Indicate whether the statement is true or false
Wages in excess of their equilibrium level help explain
a. frictional but not structural unemployment. b. structural but not frictional unemployment. c. both frictional and structural unemployment. d. neither frictional nor structural unemployment.
A tax where the percentage of income paid in taxes is the same regardless of the size of the income is a:
A. proportional tax. B. regressive tax. C. progressive tax. D. sales tax.
Which of the following must be present in order for the aggregate supply curve to form an upward slope?
a. the lure of higher profits to induce continued production b. fixed cost of inputs combined with rising prices for outputs c. rise in aggregate quantity of supplied goods and services d. constant price level for intermediate goods and services