In the extended classical model, an unexpected decrease in aggregate demand would cause unanticipated inflation to be ________ and cyclical unemployment to be ________.
A. negative; positive
B. positive; positive
C. negative; negative
D. positive; negative
Answer: A
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Refer to above figure. While selling exports it would also maximize its domestic sales by equating its marginal (opportunity) cost to its marginal revenue of $5. How much steel would the firm sell domestically, and at what price?
What will be an ideal response?
If the government raises taxes ________
A) planned expenditures fall B) equilibrium output falls C) the IS curve shifts to the left D) all of the above E) none of the above
The short-run supply curve of the perfectly competitive firm is the firm's
a. MC curve. b. AVC curve. c. MC curve above the minimum point on the AVC curve. d. MC curve above the minimum point on the ATC curve.
Using tradable allowances instead of quotas may be a better solution to the provision of common resources because they:
A. allow the government to set a specific amount of the good to be consumed, while quotas do not. B. ensure that the resource is allocated to those with the highest willingness to pay, while quotas do not. C. assign private property rights-and an incentive, as owners, which means common resource now get overused, and quotas do not. D. allocate the good in a less efficient way, and quotas do not.