Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the long run would be:
A. P1 and Y2.
B. P2 and Y1.
C. P3 and Y1.
D. P3 and Y2.
Answer: D
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Holding all other factors constant, the quantity demanded of an asset is
A) positively related to wealth. B) negatively related to its expected return relative to alternative assets. C) positively related to the risk of its returns relative to alternative assets. D) negatively related to its liquidity relative to alternative assets.
The endogenous growth model predicts that
A) there is convergence in incomes per capita across countries. B) output per capita is constant. C) rich countries will always become poor. D) differences in per capital incomes across countries persist forever.
If a resource can be put to a single use and has no alternative uses then:
a. economic rents are zero. b. transfer earnings are maximized. c. total earnings are zero. d. all earnings are economic rents. e. all earnings are transfer earnings.
Life insurance companies usually require applicants to have physicals and disclose information on their health. This practice is designed to address
a. a principal-agent problem. b. a moral-hazard problem. c. a problem involving hidden characteristics. d. all of the above are correct.