Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2.
B. P2 and Y2.
C. P3 and Y1.
D. P2 and Y3.
Answer: D
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The hiring of a brilliant tax lawyer by a firm that wants to find tax loopholes
a. encourages economic efficiency by moving resources away from the government into the private sector b. encourages economic efficiency only if the firm's profit increases c. is an example of economic inefficiency caused by devoting resources to wealth redistribution rather than to production d. involves the firm in a zero-sum game against other firms e. involves the firm in a zero-sum game against the government
The present value of $100 received 3 years from now given a current interest rate of 6% is
A. $82.00. B. $83.96. C. $100.00. D. $116.00.
The existence of economies of scale suggests that
A. foreign direct investment (FDI) is a complement to exporting. B. exporting can be preferable to FDI. C. inherent disadvantages cannot be fully overcome. D. licensing local firms in the foreign market is preferable to exporting.
Mechanism design can be used to provide employers and employees with the right incentives in labor markets.
Answer the following statement true (T) or false (F)