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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Suppose a player in a sequential game has 2 potential decision nodes, with 5 possible actions at each node. Then he has 25 possible pure strategies.
Answer the following statement true (T) or false (F)
As defined by Thomas Schelling, a "strategic move" is
A) any strategy choice in a game. B) any strategy choice consistent with Nash equilibrium. C) any strategy choice in a sequential game. D) a strategy choice that influences the subsequent strategy choice of another player. E) a strategy choice that restricts the set of outcomes available to another player.
Given full-employment output = $2,800, equilibrium output = $2,500, and MPS = 0.25, which of the following changes would most likely bring the economy to a full-employment level of national output?
a. $300 decrease in taxes. b. $75 increase in government spending. c. $75 decrease in taxes. d. $300 increase in government spending. e. $75 decrease in government spending.
Which of the following looks at the demand side of the market to explain some of the observed international trade patterns?
a. The theory of consumer preferences b. The factor abundance theory c. The product life cycle theory d. The Ricardian model e. The human skills approach