If a natural disaster were to cause a negative long-run supply shock to the economy, once the economy adjusts, the new equilibrium will be at a:
A. higher price level and lower level of output.
B. lower price level and lower level of output.
C. higher price level and higher level of output.
D. lower price level and higher level of output.
Answer: A
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When a nation exports a good, its total surplus ________, and when it imports a good, its total surplus ________
A) increases; increases B) decreases; decreases C) increases; decreases D) decreases; increases E) does not change; does not change
When the actions of a central bank induce actions from other banks in the country
A) the other banks are reacting to an announcement effect. B) the other banks are concerned about a penalty rate. C) the other banks are acting to prevent liquidity problems. D) the other banks are acting as fiscal agents.
While much of New Classical macroeconomics is being refuted by the evidence, at least one part of it may be a permanent legacy to all economists. It is the insistence on a certain aspect of macroeconomic policy:
A) It has as much impact on SAS as on AD. B) It has its impact on nominal and not real variables. C) People will try to anticipate it and then act accordingly. D) It has no impact on SAS or AD, but does affect LAS.
The change in price that results from a leftward shift of the supply curve will be greater if
A) the demand curve is relatively steep than if the demand curve is relatively flat. B) the demand curve is relatively flat than if the demand curve is relatively steep. C) the demand curve is horizontal than if the demand curve is vertical. D) the demand curve is horizontal than if the demand curve is downward sloping.