If a hurricane were to wipe out the majority of the eastern seaboard in the United States:
A. neither the short-run nor long-run aggregate supply curves would be affected.
B. only the long-run aggregate supply curve would shift left.
C. only the short-run aggregate supply curve would shift left.
D. the long-run and short-run aggregate supply curves would both shift left.
Answer: D
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If the demand for a good falls when income falls, then the good is called an inferior good
a. True b. False Indicate whether the statement is true or false
An expansionary gap creates labor shortage that eventually results in a higher nominal wage and a lower price level
Indicate whether the statement is true or false
Assume all of the information from Question #11 above: If Willy actually does install the extra safety equipment, it will cost him $20,000 to do so. Based on this new information about its cost, will Willy be willing to install the new equipment?
A. Yes, because it costs him less than it is worth. B. Yes, because it costs him more than it is worth. C. No, because it costs him more than it is worth. D. No, because it costs him less than it is worth.
Economists agree that the structure of the Consumer Price Index has some problems that limit its usefulness as a reliable measure of inflation. What is one of these drawbacks?
A. It ignores changes in consumption patterns brought about by changes in the relative prices of consumer goods. B. It is based on the faulty assumption that each consumer buys only one unit of each item. C. It is based on a market basket of mail-order items and does not include the goods that consumers typically purchase. D. It is based on the faulty assumption that consumption choices are not influenced by income levels.