A simultaneous rise in aggregate demand and fall in short-run aggregate supply will definitely
A) raise the price level, but there is not enough information to know how Real GDP will change.
B) lower Real GDP, but there is not enough information to know how the price level will change.
C) raise the price level and Real GDP.
D) raise Real GDP, but there is not enough information to know how the price level will change.
E) raise the price level and lower Real GDP.
A
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An industry characterized by only a few firms in the market is called: a. a monopoly
b. monopolistic competition. c. an oligopoly. d. perfect competition.
A market equilibrium:
A. is never socially optimal. B. might not maximize total economic surplus. C. is socially optimal. D. leaves unexploited opportunities for individuals.
Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
For a cartel to be successful in increasing economic profits for its members:
A. individual firms must be encouraged to adjust output so as to maximize their own profits at the cartel price. B. entry of new firms must be blocked. C. price must be set equal to marginal cost. D. price must be set equal to average total cost.