In the IS-LM model, the implicit assumption made about aggregate supply was that the
a. aggregate supply schedule was vertical because prices were flexible.
b. aggregate supply schedule was horizontal because prices were fixed.
c. aggregate supply schedule was upward sloping to the right because wages and prices were fixed.
d. supply of output was fixed.
e. none of the above.
B
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Suppose you bought three tickets to a concert in advance at the University ticket window. At the last minute one friend cancelled, so you could use only two of the tickets. You sold the third ticket just outside the entrance to the concert for more than the price you had originally paid. Which transaction occurred in a market?
A. Both the purchase at the University ticket window and the sale at the concert entrance were market transactions. B. The advance purchase at the University was the only market transaction. C. The sale that occurred at the concert entrance was the only market transaction. D. Neither the purchase at the University ticket window nor the sale at the concert entrance was a market transaction.
The World Bank
A) extends long-term loans for capital investment projects to developing nations. B) mediates contracts regarding minimum prices for various globally-traded commodities. C) determines the labor force participation rate in each of its member nations. D) determines the price level in each of its member nations.
How can it be that people purchase more of a good while its price is rising?
A) The supply curve must be shifting to the left. B) The demand curve must be shifting to the right. C) Supply and demand do not change. D) It cannot happen, otherwise the law of demand is violated.
If price of product A increases by 10%, and the quantity demanded for product B drops by 50%, then these two products are
A) substitutes. B) complements. C) normal goods. D) inferior goods.