A positive temporary supply side shock will:
A. increase the level of potential output in the long run.
B. decrease the price level in the long run.
C. increase the price level in the long run.
D. have no effect in the long run.
Answer: D
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Which of the following statements regarding aggregate supply are CORRECT?
A) Moving along the long-run aggregate supply curve, both the price level and the money wage rate change by the same percentage. B) Moving along the short-run aggregate supply curve, both the price level and the money wage rate change by the same percentage. C) Moving along the long-run aggregate supply curve, the money wage rate changes but the price level is constant. D) Moving along the short-run aggregate supply curve, the money wage rate changes but the price level is constant.
A production possibilities curve that is a straight line represents the case of
A) constant costs. B) increasing costs. C) decreasing costs. D) constant opportunity costs but increasing real costs. E) constant opportunity costs but decreasing real costs.
Rational behavior for an economist means that individuals
A) are motivated by self-interest. B) never change their minds. C) always make positive choices. D) are self-sacrificing.
Fill in the blanks. The demand curve for an inferior good is _________ sloping, while the demand curve for a Giffen good is _______ sloping.
a. downward; downward. b. downward; upward. c. upward; downward. d. upward; upward.