An economy in which output has decreased and prices have increased would suggest that there has been a:
A. negative demand side shock.
B. negative supply side shock.
C. positive demand side shock.
D. positive supply side shock.
Answer: B
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An oligopoly showing no economic profit or loss has
a. an AR curve tangent to the lowest point of its ATC curve. b. an AR curve tangent to its ATC curve to the left of the lowest point. c. an MR curve above its AR curve. d. an AR curve that crosses its ATC curve.
Which of the following schools of economic thought would advocate increasing the rate of growth of the money supply during a recession and decreasing the rate of growth of the money supply during inflations?
A. The classical school B. Keynesians C. Monetarists D. Supply-side economists
In the above figure, the demand for loanable funds curve is drawn for the average expected profit. If the real interest rate is constant at 6 percent and the expected profit falls, the amount of loanable funds demanded will be
A) less than $450 billion. B) $450 billion. C) between $450 billion and $600 billion. D) greater than $600 billion.
Normative economics is
A) analysis involving value judgments about economic policies; or a statement of "what ought to be." B) analysis that is strictly limited to making either purely descriptive statements or scientific predictions. C) analysis of the behavior of the economy as a whole. D) decision making undertaken by households and business firms.