An increase in input productivity will ________.
A. reduce aggregate demand
B. reduce the equilibrium price level, assuming downward flexible prices.
C. shift the aggregate supply curve leftward
D. reduce the equilibrium real output
Answer: B
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In the above figure, an increase in the expected profit will result in a movement from point E to
A) point F. B) point G. C) point H. D) point I.
If the demand curve faced by an individual firm is perfectly elastic, the firm must be a(n)
A. pure monopoly. B. monopolistically competitive firm. C. oligopolistic firm. D. perfectly competitive firm.
If the economy is represented in the graph shown and is currently at point E2, which action is the Fed most likely to undertake?
A. Contractionary monetary policy, because it will shift AD to the left. B. Expansionary monetary policy, because it will shift AD to the right. C. Expansionary monetary policy, because it will shift AD to the left. D. Contractionary monetary policy, because it will shift AS to the right.
Answer the following questions true (T) or false (F)
1. The decisions Apple makes in determining production levels for its iPhone is an example of a microeconomic topic. 2. Examining the conditions that could lead to unemployment in an economy is an example of a microeconomic topic. 3. Suppose that to increase sales of hybrid vehicles, auto manufacturers are offering large cash incentives. This is an example of a macroeconomic topic.