Neither positive nor negative supply shocks
a. Change AD
b. Permanently change real output in an economy.
c. Change the price level in the long run.
d. Do any of the above
d
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Voluntary exchange
A. is usually beneficial to one party, but not the other. B. is always beneficial to both parties. C. is occasionally beneficial to both parties. D. occurs only between nations, not between individuals.
Use the following graph for the federal funds market to answer the next question.
A $25 billion increase in reserves will change the interest rate to ________.
A. 3.5% B. 4.0% C. 3.0% D. Undeterminable with the provided information.
Which of the following will increase the supply of vanilla ice cream?
a. an increase in the price of vanilla beans (an ingredient in ice cream) b. a decrease in the sales tax on restaurant bills c. an increase in the price of chocolate ice cream d. a decrease in the price of milk (an ingredient in ice cream) e. an increase in the price of hot fudge
A fundamental source of monopoly market power arises from
a. perfectly elastic demand. b. perfectly inelastic demand. c. barriers to entry. d. availability of "free" natural resources, such as water or air.