An example of an aggregate supply shock is
A) the cutoff of oil by the OPEC nations in the early 1970s.
B) inflation caused by a surge in demand.
C) the increase in the labor force due to the baby-boomer generation reaching working age.
D) the increase in candy sales every February.
A
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If a 20 percent decrease in the price of a good leads to a 15 percent increase in the quantity demanded, then demand is ________ and total revenue will ________ as a result of the fall in price
A) elastic; increase B) elastic; decrease C) inelastic; increase D) inelastic; decrease
If the cross-price elasticity of demand between beer and wine is 0.31, then beer and wine are
A) substitutes. B) complements. C) price-inelastic goods. D) necessities.
Besides world trade growth, what can explain the growth of international banking since the 1960s?
A) war in the Middle East B) government focus on banking regulation. C) an increase in world travel. D) the emergence of developing countries like China. E) desire of depositors to hold currencies outside the jurisdiction of the countries that issue them
The idea of two individuals being equally well off in the absence and existence of taxation is
A. time consistency of optimal taxation. B. flat tax income schedule. C. benefits received principle. D. utility definition of horizontal equity.