For each outcome below, tell what type of shift must have taken place in either the aggregate demand curve or the long-run aggregate supply curve
(a) In the short run, the price level is unchanged and output rises.
(b) In the long run, the price level declines and output is unchanged.
(c) In the long run, the price level rises and output declines.
(a) The aggregate demand curve shifts to the right.
(b) The aggregate demand curve shifts to the left.
(c) The long-run aggregate supply curve shifts to the left.
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
A textbook publisher is in monopolistic competition. The firm can sell no books at $100 a book, but for each $10 cut in price, the quantity of books it can sell increases by 20 books a day
The firm's average variable cost and marginal cost is a constant $20 per book. What is the publisher's profit-maximizing level of output? A) 60 books per day B) 80 books per day C) 100 books per day D) 120 books per day
Derivatives
A. can be used to reduce risk. B. can be a source of risk. C. made the financial crisis of 2007–2009 worse than it otherwise would have been. D. All of these responses are correct.
Which of the following statement(s) best describes trade-offs?
a. The trade-offs in many production possibilities frontiers are represented by a straight line because the law of diminishing returns holds that as resources are added to an area, the marginal gains tend to diminish. b. The trade-offs in many production possibilities frontiers are represented by a curved line because the law of diminishing returns holds that as resources are added to an area, the marginal gains tend to increase. c. The trade-offs in many production possibilities frontiers are represented by a straight line because the law of diminishing returns holds that as resources are added to an area, the marginal gains tend to increase. d. The trade-offs in many production possibilities frontiers are represented by a curved line because the law of diminishing returns holds that as resources are added to an area, the marginal gains tend to diminish.