In the IS-LM model when M/P rises, in short-run equilibrium, in the usual case, the interest rate ______ and output ______.
Fill in the blank(s) with the appropriate word(s).
falls; rises
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How do the wages in the United States compare to those in northern Europe?
A. U.S. wage rates are higher than those of all northern European nations. B. Northern Europe’s average wage rates are higher. C. U.S. wage rates are higher than those in Germany and the Netherlands. D. They are similar.
Which of the following will happen if a new firm enters in an oligopoly with differentiated products?
A) Market price will fall. B) Market price will rise. C) Existing firms will gain market share. D) Each firm will have an equal market share.
Assume that both the demand curve and the supply curve for DVD players shift to the left but the demand curve shifts more than the supply curve. As a result,
A) both the equilibrium price and quantity of DVD players will decrease. B) the equilibrium price of DVD players will decrease; the equilibrium quantity may increase or decrease. C) the equilibrium price of DVD players may increase or decrease; the equilibrium quantity will decrease. D) the equilibrium price of DVD players will increase; the equilibrium quantity may increase or decrease.
The price elasticity of supply measures
A) the responsiveness of quantity demanded to a change in price. B) the responsiveness of quantity supplied to a change in price. C) the change in supply due to a change in input prices. D) the change in price due to a change in quantity supplied.