A positive temporary supply side shock will:
A. increase the level of potential output in the long run.
B. decrease the price level in the long run.
C. increase the price level in the long run.
D. have no effect in the long run.
Answer: D
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When an economy begins to move from a recession to an expansion, the output gap typically
A) remains positive. B) remains negative. C) switches from negative to positive. D) switches from positive to negative.
The main difference between the price-quantity graph of a perfectly competitive firm and a monopoly is
A) that the competitive firm's demand curve is horizontal, while that of the monopoly is downward sloping. B) that a monopoly always earns an economic profit while a competitive company always earns only normal profit. C) that a monopoly maximizes its profit when marginal revenue is greater than marginal cost. D) that a monopoly does not incur increasing marginal cost.
Detailed studies indicate that, on balance, the Social Security retirement system
a. redistributes a substantial amount of income from the rich to the poor. b. redistributes a substantial amount of income from whites to blacks. c. is particularly advantageous to those with a shorter life expectancy. d. is not particularly advantageous to the poor due to their shorter life expectancy.
What is the present value of $10,000 8 years from now if the interest rate is 8%?
What will be an ideal response?