Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward
B. Short-run aggregate supply shifting downward
C. Aggregate demand shifting rightward
D. Aggregate demand shifting leftward
Answer: B
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If resale price maintenance leads to a shift in the market supply that exceeds the shift in the market demand, the quantity of the good sold will ________ and the manufacturer's profit will ________.
A) decrease; decrease B) decrease; increase C) increase; decrease D) increase; increase
Monetization of the deficit (or debt) means that
a. the government uses monetary policy to control the economy rather than fiscal policy. b. inflation accounting corrects for price increases. c. the Fed buys newly issued debt and increases the money supply. d. the amount of money in circulation is equal to the size of the debt.
If 1 U.S. dollar exchanges for 8.97 pesos, how much would it cost in pesos to purchase a Big Mac priced at $2.75?
What will be an ideal response?
Refer to the data provided in Table 9.2 below to answer the question(s) that follow.
Table 9.2
Refer to Table 9.2. The market price is $42 and this firm is producing four units of output. Which of the following would you recommend to this firm?
A. Increase output to six units so that marginal cost equals marginal revenue. B. Reduce price to $17 so that marginal cost will equal marginal revenue at 4 units of output. C. Increase output to seven units so that price is less than marginal cost. D. Continue producing four units of output, because the firm is able to make an economic profit.