An In The News article in the text is titled "The Misery Index." If an increase in government regulations causes the AS curve to shift to the left, the misery index will
A. Decrease.
B. Remain unchanged.
C. Increase, decrease, or remain unchanged, depending on circumstances.
D. Increase.
Answer: D
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For deflation to occur,
A) national income must decrease. B) real GDP must decrease. C) the price level must decrease. D) nominal GDP must decrease.
In a free market economy, the market clearing (equilibrium) price in the above table would adjust to
A) $1. B) $3. C) $4. D) $5.
A monopolistically competitive firm chooses
A) both the quantity of output to produce and the price at which it will sell its output. B) the price of the product it sells but market forces determine the quantity it will be able to sell. C) the quantity of output to produce but the price of the product it sells is determined collectively by all firms in the industry. D) the price of the product it sells but the quantity of output to produce is agreed upon by all firms in the industry.
In the above figure, at a price of $4 per unit, a profit-maximizing perfectly competitive firm will
A) shut down because its total revenue is less than its variable costs. B) incur an economic loss. C) produce 5 units. D) Both answers A and B are correct.