The desire for goods and services is
a. created by a market economy
b. the ultimate explanation for all production
c. why it is so difficult to explain how our economy works
d. the cause of inflation
e. what causes the market wage for labor to continually increase
B
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Refer to Figure 10.5. A shift from MP1 to MP2 will occur if
A) the Fed decreases its target for the short-term nominal interest rate. B) the term structure effect increases. C) the default-risk premium decreases. D) the expected inflation rate increases.
Along the intermediate range of the aggregate supply curve, an increase in the aggregate demand curve will increase:
a. both the price level and real GDP. b. only real GDP. c. only the price level. d. real GDP and reduce the price level.
As the number of British pounds that exchange for a dollar rises on foreign currency markets: a. the British will have an incentive to import fewer U.S. goods
b. the British will find it easier to export goods to the United States. c. the British will find U.S. goods to be more expensive in their stores. d. all of the above will be true.
The reason that the "fast-casual" restaurant market is monopolistically competitive rather than perfectly competitive is because
A) barriers to entry are very low. B) there are many firms in the market. C) products are differentiated. D) entry into the market is blocked.