?Exhibit 10A-2 Macro AD-AS Model
?In Exhibit 10A- 2, the intersection of AD with SRAS indicates:
A. ?a short-run equilibrium.
B. ?a long-run equilibrium.
C. ?that the economy needs policies to reduce unemployment.
D. ?that the economy is at full employment.
Answer: A
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Suppose the quantity of sodas and the quantity of popcorn are on an indifference curve/budget line diagram. An increase in income shifts the budget line ________ and, if popcorn is a normal good, shifts the demand curve for popcorn ________
A) rightward; rightward B) rightward; leftward C) leftward; rightward D) leftward; leftward
In general, during the business cycle, when economic activity is peaking:
a. interest rates begin to creep higher b. unemployment levels are low c. inflation begins to edge higher d. all of the above
Short-run supply curves for perfectly competitive firms tend to be upward sloping because:
A) there is diminishing marginal product for one or more variable inputs. B) marginal costs increase as output increases. C) marginal fixed costs equal zero. D) A and B are correct. E) B and C are correct.
In Adam Smith's competitive market economy, the question of what goods to produce is determined by the:
a. "invisible hand" of the price system. b. "invisible hand" of government. c. "invisible hand" of public interest. d. "visible hand" of laws and regulations.