In the figure above, the economy is at an equilibrium with real GDP of $16 trillion and a price level of 110. As the economy moves toward its ultimate equilibrium, the ________ curve shifts ________
A) aggregate supply; leftward
B) aggregate supply; rightward
C) aggregate demand; rightward
D) aggregate demand; leftward
E) potential GDP; leftward
B
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A reduction in national savings will
a. increase foreign capital flows into the country. b. reduce domestic investment. c. reduce domestic interest rates. d. both a and b. e. none of the above.
An economy has two workers, Jen and Rich. Every day they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. What is the opportunity cost for Rich to produce one TV?
A. 1/3 radio B. 1/5 radio C. 3 radios D. 12 radios
Purchases of Huggies diapers should
A) remain fairly constant over the business cycle. B) increase in recessions and decrease in expansions. C) decrease in recessions and increase in expansions. D) increase in recessions and remain constant in expansions.
Refer to the below table for a profit-maximizing firm. The price of the firm's product is $10 per unit and the wage rate is a constant $110 a day. How many workers will the firm hire, assuming purely competitive product and resource markets?
A. 4
B. 5
C. 6
D. 7