The aggregate supply curve shows how much the nation’s businesses are willing and able to produce at each price level.
Answer the following statement true (T) or false (F)
True
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A large increase in the supply of HD-TV sets occurs simultaneously with a smaller decrease in its demand. As a result, the equilibrium price will ________ and the equilibrium quantity will ________.
A. decrease, increase B. increase, decrease C. decrease, decrease D. increase, increase
Which of the following is true of an annually balanced federal budget? a. Most economists agree that the federal government should balance its budget just as each household does. b. Such a policy would require the government to increase its spending when tax receipts decrease
c. Such a policy became popular between the 1930s and 1960s. d. Such a policy guarantees that the economy is its potential level. e. Such a policy could worsen a contractionary gap.
A World View article titled "Secondhand Smoke Kills 600,000 People a Year: Study" implies the harm caused to nonsmokers is
A. Included in the market price of cigarettes. B. An example of externality costs. C. An example of a public good. D. An example of government failure.
Suppose the supply of ocean front property in San Diego is perfectly inelastic. Any increases in demand for this property increases the
A. present discounted value. B. economic rent. C. opportunity cost of land owners. D. real interest rate.