The short-run aggregate supply curve in modern Keynesian analysis represents the relationship between
A. the nominal output of goods and services and the real output of goods and services.
B. the real output of goods and services in the economy and the price level when people have fully adjusted their behavior.
C. the real output of goods and services in the economy and the price level when people have not fully adjusted their behavior.
D. the nominal amount of goods and services in the economy and the price level.
Answer: C
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Refer to the figure below. Player B can infer that Player A will: 
A. choose Down when B chooses Left and choose Up when B chooses Right. B. always choose Up. C. always choose Down. D. choose Up when B chooses Left and choose Down when B chooses Right.
The above figure shows supply and demand curves for milk. In an effort to help farmers, the government passes a law that establishes a $3 per gallon price support. To maintain the price support, government must purchase
A) Q1 gallons. B) Q2 gallons. C) Q1 - Q2 gallons. D) Q2 - Q1 gallons.
Transactions costs prevent purchasing power parity from holding because:
A. they make creating exchanges too costly in some places. B. they include the expense of transporting the goods to be sold in another country. C. the price of a good sold in another country must include the cost of getting it there, which can be high and cause a large price differential. D. All of these statements are true.
A positive externality
a. causes the product to be overproduced. b. provides an additional benefit to market participants. c. benefits consumers because it results in a lower equilibrium price. d. is a benefit to a market bystander.