Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward
B. Short-run aggregate supply shifting downward
C. Aggregate demand shifting rightward
D. Aggregate demand shifting leftward
Answer: B
You might also like to view...
Archibald's Tattoos is a perfectly competitive firm. The firm's costs are shown in the table above. If the market price of a tattoo is $17.50, what is the firm's economic profit?
A) zero B) $2.50 per hour C) $12.50 per hour D) -$10.00 per hour
If a higher inflation is expected, what would you expect to happen to the shape of the yield curve? Why?
What will be an ideal response?
Which of the following will not result in a rightward shift of the market supply curve for labor?
a. an increase in immigration b. an increase in labor productivity c. an increase in the working-age population d. a decrease in nonwage income
If Congress decreases the amount of government insurance on bank deposits, then this action would:
A. Create a moral hazard problem B. Reduce a moral hazard problem C. Create an adverse selection problem D. Reduce an adverse selection problem