Figure 10-8
?
In the short run, the firm in Figure 10-8 will shut down if the price falls below
A. $8.
B. $6.
C. $5.
D. $1.
Answer: C
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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
According to Keynes, the adoption of an expansionary fiscal policy will cause: a. both equilibrium price level and equilibrium output to rise
b. equilibrium price level to rise and equilibrium output to fall. c. equilibrium price level to fall and equilibrium output to rise. d. both equilibrium price level and equilibrium output to fall. e. equilibrium price level to remain the same and equilibrium output to fall.
Interest on the government debt is an example of uncontrollable fiscal spending.
Answer the following statement true (T) or false (F)
A decrease in input costs to firms in a market will result in a(n)
a. decrease in equilibrium price and an increase in equilibrium quantity.
b. decrease in equilibrium price and a decrease in equilibrium quantity.
c. increase in equilibrium price and a decrease in equilibrium quantity.
d. increase in equilibrium price and an increase in equilibrium quantity.