A year-long drought that destroys most wheat crops for the season would shift the:
A. short-run aggregate supply curve only.
B. aggregate demand curve only.
C. aggregate demand curve, and the short-run aggregate supply curve would shift in response.
D. short-run aggregate supply curve and the long-run aggregate supply curve.
Answer: A
You might also like to view...
Refer to Figure 3-4. If the current market price is $15, the market will achieve equilibrium by
A) a price increase, increasing the quantity supplied and decreasing the quantity demanded. B) a price decrease, decreasing the supply and increasing the demand. C) a price decrease, decreasing the quantity supplied and increasing the quantity demanded. D) a price increase, increasing the supply and decreasing the demand.
Firms that produce ________ products must be ________ competitive
A) differentiated; imperfectly B) differentiated; perfectly C) standardized; imperfectly D) standardized; perfectly E) exported; imperfectly
When the economy reaches its potential output, the price level cannot rise any further
a. True b. False
When an industry is characterized by technology spillover, what should the government do to ensure that the market equilibrium equals the socially optimal equilibrium?
a. Impose a tax greater than the value of the technology spillover. b. Not allow production of any product that causes a technology spillover. c. Provide a subsidy equal to the value of the technology spillover. d. Require producers to "clean up" any spillover that results from their production process.