A positive temporary supply side shock will:
A. increase the level of potential output in the long run.
B. decrease the price level in the long run.
C. increase the price level in the long run.
D. have no effect in the long run.
Answer: D
You might also like to view...
Two isoquants, which represent different output levels but are derived from the same production function, cannot cross because
A) isoquants represent different utility levels B) this would violate a technical efficiency condition C) isoquants are downward sloping D) additional inputs will not be used by profit maximizing firms if those inputs decrease output E) Both B and D are true.
A "Credible Threat"
A) is also called a "tit-for-tat" strategy. B) always set a low price. C) minimizes the return of your opponent. D) is a strategy selection that is in your best interest. E) provides the best return for both players.
In the main chorus of the Keynes-Hayek rap lyrics, Keynes states "I want to steer markets" and Hayek replies, "I want them set free.". These statements are referring to
a. the tendency of Keynesians to favor government intervention and central planning and the tendency of Hayekians to favor free markets. b. the tendency of Keynesians to favor restrictive fiscal policy and the tendency of Hayekians to favor expansionary fiscal policy. c. the tendency of Keynesians to favor budget deficits and the tendency of Hayekians to insist on budget surpluses. d. the tendency of Keynesians to favor fiscal policy and of Heyekians to favor monetary policy.
In the short run, the firm's average fixed costs
a. always increase as output increases. b. always decline as output increases. c. equal zero. d. remain constant as output expands.