In the diagrams below, the subscript "1" refers to the initial position of the curve, while the subscript "2" refers to the final position after the curve shifts.
Which diagram above illustrates the effects on the peanut butter market, if severe flooding destroys a large portion of the peanut crop in the economy?
A. (1)
B. (2)
C. (3)
D. (4)
Answer: D
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Which of the following can be described as direct finance?
A) You take out a mortgage from your local bank. B) You borrow $2500 from a friend. C) You buy shares of common stock in the secondary market. D) You buy shares in a mutual fund.
Crucial assertions in the menu-cost literature are that those costs ________ be large for them to have an effect on firms' pricing, while potential total welfare losses ________ menu costs that have been avoided
A) need not, may be several times larger than B) need not, are generally much less than C) must, may be several times larger than D) must, are generally much less than
If both frictional and structural unemployment increased, the natural rate of unemployment:
a. Would increase b. Would not change c. Would decrease d. Would be affected in an unpredictable manner
According to the theory based on rational expectations and flexible wages and prices,
A. neither fiscal nor monetary policy influence real Gross Domestic Product (GDP) in the long run. B. only the combination of discretionary fiscal policy and conservative monetary policy can affect real Gross Domestic Product (GDP) in the long run. C. monetary policy has less effect on real Gross Domestic Product (GDP) than fiscal policy in the long run. D. fiscal policy has less effect on real Gross Domestic Product (GDP) than monetary policy in the long run.