If a large fraction of the capital stock in the U.S. stopped functioning, it would:
a. Shift the short run aggregate supply curve to the left
b. Shift the long run aggregate supply curve to the left.
c. Shift both the short run aggregate supply curve and long run aggregate supply curves to the left.
d. Do none of the above
c
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Consider a PPF for tapes and soda. If the opportunity cost of a tape increases as the quantity of tapes produced increases and also the opportunity cost of a soda increases as the quantity of soda produced increases, then the PPF between the two
goods will be A) a straight, downward-sloping line. B) a straight, upward-sloping line. C) bowed outward. D) All of the above are possible and more information is needed to determine which answer is correct.
Refer to Table 14-3. Consider the above simplified balance sheet for a bank. If the required reserve ratio is 10 percent, the bank can make a maximum loan of
A) $2,000. B) $5,000. C) $6,300. D) $45,000.
What is the intuition that an expansion of an individual's budget set represents a gain?
A) More options are preferred to less. B) Money is the root of all happiness. C) Information is power. D) Scarcity is avoidable with prosperity.
In the aggregate demand and aggregate supply model, sticky wages, sticky prices, and misperceptions about relative prices
a. have temporary effects. b. explain why the short run aggregate supply curve might shift. c. explain why the aggregate demand curve is downward sloping. d. explain monetary neutrality.