In the classical model, a shift to the right in aggregate demand would result in
A) a permanent increase in unemployment.
B) a permanent increase in real incomes.
C) an increase in the price level.
D) a permanent shift past full employment.
C
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If MUa/Pa is greater than MUb/Pb, and the consumer is consuming both goods, the consumer is not maximizing utility. True or false. Explain
What will be an ideal response?
According to the equation of exchange, if M = $400, P = 8, and Y = $200, then V equals
A) 100. B) 4. C) 160. D) 8.
If two or more markets are closely related,
A) a partial equilibrium analysis will tend to overstate the price impact of a supply shock. B) a partial equilibrium analysis will tend to accurately predict the price impact of a supply shock. C) a partial equilibrium analysis will tend to understate the price impact of a supply shock. D) they should be analyzed concurrently but using partial equilibrium analysis alone.
Use the figure below to answer the following question.
The diagram concerns supply adjustments to an increase in demand (D1 to D2) in the immediate period, the short run, and the long run. In the immediate period, the increase in demand will
A. increase equilibrium quantity but not equilibrium price. B. increase equilibrium price but not equilibrium quantity. C. increase both equilibrium price and quantity. D. have no effect on either equilibrium price or quantity.