An increase in the price level is likely to increase the aggregate amount of output supplied in the short run because
A. wages change in the short-run.
B. wages are sticky in the short-run.
C. the aggregate supply curve is vertical in the short-run.
D. interest rate is high in the short-run.
Answer: B
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Scarcity raises both price and marginal utility but generally reduces total utility.
Answer the following statement true (T) or false (F)
The nominal exchange rate is 32 Russian rubles per dollar. The price of a bushel of wheat is 260 rubles in Russia and $7 in the U.S. A. What is the real exchange rate? Show your work. B. Can arbitragers make a profit? C. If your answer to B is yes, where would arbitragers buy and where would they sell
The stability of cartel prices is challenged because
A. cartels never exist. B. though they increase profits, they are vulnerable to those that seek to make more profit by breaking the agreements that generated them. C. though they increase profits, they are vulnerable to egalitarian interests. D. they never increase the profitability of their members.
A bank increased its fees for processing personal checks from 18 cents to 24 cents per check. In a statement accompanying the announcement, the bank said that some customers who reduce the number of checks they write would see no change in their overall account fee. What is the implication of this statement for these customers?
a. The price elasticity of demand for check writing is less than one. b. The price elasticity of demand for check writing is greater than one. c. They are indifferent to the check writing fee. d. They have a unit-elastic demand for check writing.