A year-long drought that destroys most of the summer's crops would be considered a:
A. short-run supply shock.
B. long-run demand shock.
C. long-run supply shock.
D. short-run demand shock.
Answer: A
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The price elasticity of supply is 0.6. This means that
A) a $10 increase in price would increase quantity supplied by 60. B) a 150 percent increase in price would increase quantity supplied by 90 percent. C) a 50 percent increase in quantity will occur when price increases by 30 percent. D) a 10 percent increase in quantity will occur when price increases by 6 percent.
Since 1933, bank failures have occurred
a. frequently b. very rarely c. once every 3 years d. every year e. once every 5 years
Consider a color-blind firm that is currently maximizing profits. An affirmative action policy is put in place requiring that all firms in the industry abide by a certain quota. Which of the following will occur?
A. The firm will have to fire some workers. B. If the firm currently meets the required quota, it will cut costs by adjusting labor to exactly meet the affirmative action requirements. C. The firm will have to start hiring some workers that it would prefer not to. D. If the firm currently meets the quota, it will begin to lose profits due to the affirmative action requirements. E. If the quota is already met, the firm will make no changes in its hiring practices.
The narrowest definition of the money supply, including cash and checking deposits, is known as
A. M0. B. M1. C. M payments. D. currency. E. real-value money.