Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C
B. D; B
C. A; B
D. B; C
Answer: B
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Marginal cost is calculated for a particular increase in output by
A) dividing the change in total cost by the change in output. B) dividing the total cost by the change in output. C) multiplying the total cost by the change in output. D) multiplying the change in total cost by the change in output.
Real business cycle theory argues that the primary cause of business cycles is fluctuations in
A) preferences. B) government spending. C) the importance of externalities. D) total factor productivity.
The CPI (using a 2000 base year) for 1965 is 26.0 . Suppose a household's annual take-home pay in 1965 was $8,320 . What would be an equivalent home pay in 2000?
a. $10,483. b. $21,632. c. $23,680. d. $32,000.
If a firm is a price taker, it operates in a
a. competitive market. b. monopoly market. c. oligopoly market. d. monopolistically competitive market.