An decrease in equilibrium quantity would result from
A. an increase in demand with no change in supply.
B. a decrease in supply with no change in demand.
C. a decrease in demand with no change in supply.
D. both a decrease in supply with no change in demand and a decrease in demand with no change in supply.
D. both a decrease in supply with no change in demand and a decrease in demand with no change in supply.
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If two countries with diminishing returns and different marginal rates of substitution between two products were to engage in trade, then
A) the marginal rates of substitution of both would become equal. B) the shapes of their respective production possibility frontiers would change. C) the larger of the two countries would dominate their trade. D) the country with relatively elastic supplies would export more. E) the opportunity costs for the smaller country would increase.
Expansionary fiscal policy can be used to reduce unemployment by
A) increasing long-run aggregate supply so as to raise real GDP. B) increasing aggregate demand so as to raise real GDP. C) reducing nominal wages so as to encourage firms to hire more workers. D) eliminating inefficiencies from labor markets.
Which of the following explains why supply is more elastic as more time passes?
A) It is difficult or impossible to increase the quantity produced in a short period of time. B) Consumers have more time to search for substitutes. C) Sellers try to take advantage of a high price in the short term. D) The supply curve becomes generally steeper as more time passes. E) There is no explanation for this phenomenon.
When the government runs a deficit, which of the following is true?
A) G > T + TR B) T < G + TR C) T > TR - G D) G > TR - T