Consider the following statement: "If the government attempts to raise employment through increased fiscal spending, all it will end up doing is increasing the price level." The statement rests on the assumption that:
a. the aggregate demand curve is a horizontal line.
b. the aggregate supply curve is a vertical line.
c. the aggregate supply curve is upward-sloping.
d. the aggregate supply curve is downward-sloping.
e. the aggregate supply curve is a horizontal line.
b
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Regarding the law of supply, which of the following statements is correct?
A) As the price of a good or service rises, the quantity supplied will increase. B) As the price of a good or service rises, the quantity supplied will decrease. C) The ceteris paribus assumption does not apply. D) As demand falls, supply rises.
Figure 7.6 shows prices, demands, and cost data for the only restaurant in a small town. What is its profit from non-senior customers under the senior discount policy of a $7 senior price and a $10 non-senior price?
A. $1,200 B. $1,500 C. $2,280 D. $2,560
Under which one of the following situations would you be better off?
A. You have $10,000 in your savings account paying 5 percent per year and unanticipated inflation is 8 percent per year. B. You lend a friend $1,000 at 6 percent to be repaid in one year and unanticipated inflation is 7 percent during the year. C. You have paid $500 for a $1,000 U.S. savings bond that matures in 10 years and unanticipated inflation is 10 percent per year. D. You borrowed $2,500 at 7 percent to pay for this year's college expenses and unanticipated inflation is 12 percent during the year.
Collusion always involves firms engaging in a
A. noncooperative game. B. cooperative game. C. vertical merger. D. horizontal merger.