Refer to the diagram and assume the economy is operating at equilibrium point w. If wages and other resource prices are flexible downward, in the long run a decrease in the price level from P 2 to P 1 would move the economy from point w to point:
A. v.
B. x.
C. t.
D. y.
D. y.
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According to the income approach, the largest component of national income is:
a. government spending. b. proprietor's income. c. net interest. d. personal consumption expenditures. e. compensation of employees.
Equilibrium real GDP is
a. independent of the price level b. determined solely in the loanable funds market c. controlled by the Fed d. directly related to the interest rate e. the level of output at which total spending equals total output for a given price level
Angela, Bonnie, and Carl are visiting the local paint store. Angela, owner of Angela's Artful Painting Co, is posting a Help Wanted sign because she is looking for more painters to join her crew. Bonnie, who is a sole proprietor, is placing an order for 12 gallons of green paint. Carl is a painter who is looking for a job and is reading the bulletin board in the paint shop. Who is operating in
the long run? a. Angela only b. Bonnie only c. Carl only d. Carl and Angela e. no one is operating in the long run
The highly influential book by Adam Smith, who brought up the "invisible hand" notion, is titled:
A. The Worldly Philosophers B. The Affluent Society C. The Age of the Economist D. The Wealth of Nations