Supply curves are usually assumed to slope upward because
a. profits fall as prices rise
b. a higher price leads to increases in demand
c. a higher price leads to decreases in demand
d. a higher price attracts resources from other less valued uses
e. firms drop out of the market as prices rise
D
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When a shortage exists in a market
A) the market clearing price is above equilibrium and market forces will cause the price to fall. B) the quantity demanded is less than the quantity supplied at the existing price. C) the current price is below the market clearing price and the price will rise. D) the quantity supplied is greater than the quantity demanded at the current price.
New classical economists contend that an unexpected increase in the money supply will:
a. increase the unemployment rate in the short run. b. reduce the unemployment rate in the short run. c. cause no short-run change in the unemployment rate. d. reduce the unemployment rate in the long run. e. increase the unemployment rate in the long run.