The law of supply states that other things being equal
A) supply creates its own demand.
B) supply will increase if productivity increases.
C) as price increases, quantity supplied increases.
D) supply will increase to meet demand if demand increases.
Answer: C
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When the actual exceeds the natural unemployment rate, this means that we have ________ unemployment
A) positive structural B) negative structural C) positive cyclical D) negative cyclical
Manufacturers of Weightbegone are concerned that genetic advances in weight control might reduce the demand for their diet snacks. This is an example of
a. firm-specific risk, which will likely raise shareholders' demand for higher return. b. firm-specific risk, which will likely not likely raise shareholders' demand for higher return. c. market risk, which will likely raise shareholders' demand for higher return. d. market risk, which will likely not raise shareholders' demand for higher return.
The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. long-run equilibrium property. D. short-run equilibrium property.
Suppose the economy has a low level of employment. This would imply
A. that the economy is operating on the SRAS curve and that government spending could be decreased to reduce unemployment. B. that the economy is operating to the left of the LRAS curve and that government spending could be increased to reduce unemployment. C. that fiscal policy has been ineffective and should be abandoned. D. that the government should engage in expansionary fiscal policy and increase the tax rate.