Which of the following would not shift the supply curve?
A) A rise in the price of the good
B) A fall in the expected future price of the good
C) A rise in the costs of production of the good
D) A negative supply shock that destroys a portion of output
A
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Because of the problems of adverse selection and moral hazard, it has been suggested that the World Bank and International Monetary Fund
A) make loans to the riskiest nations so that private investors will not be tempted to take a risk. B) impose tougher preconditions on borrowers. C) not make loans to risky nations because there is a high demand for funds from safer nations. D) loan only to countries that have free elections.
Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C