Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as 
A. long-run aggregate supply shifting leftward
B. Short-run aggregate supply shifting upward
C. Short-run aggregate supply shifting downward
D. Aggregate demand shifting leftward
Answer: B
You might also like to view...
Answer the following statement(s) true (T) or false (F)
1. The slope of the budget line depends on the wage rate and the amount of human capital the worker has accumulated. 2. An increase in a worker's marginal productivity can cause an increase in the worker's non-labor income. 3. Human capital tends to increase over the course of a person's life. 4. Because people work more efficiently in periods of high productivity, they tend to work fewer hours because it does not take as long to complete assignments. 5. Unlike regular indifference curve analysis, that involving the labor consumption trade-off only includes income effects (not substitution effects) because labor only generates income.
Issuing marketable emission allowance permits to polluting firms will result in those firms polluting more than would be desired by the benevolent social planner
Indicate whether the statement is true or false
Refer to Figure 26-10. In the figure above, suppose the economy is initially at point A. The movement of the economy to point B as shown in the graph illustrates the effect of which of the following policy actions by the Federal Reserve?
A) an open market purchase of Treasury bills B) a decrease in the required reserve ratio C) an open market sale of Treasury bills D) an increase in income taxes
Economic profits disappear when:
A.) Price is greater than marginal costs. B.) Price falls to the level of minimum average total cost. C.) Price is greater than average variable cost. D.) Firms exit an industry.